About The 77 , Ltd.

The Since its foundation in 1878, based on our management philosophy of dedication to serve June 2017 the local community for the prosperity of the local community, throughout the four March 1999 Trajectory of Abolished the New York Branch and Representative Office Transitioned to a Company with an generations of Meiji, Taisho, Showa, and Heisei, The 77 Bank, Ltd. has developed steadily August 1999 Audit & Supervisory Committee Trust and by overcoming many difficulties while pursuing sound management. In this new generation Growth Merged The 77 Card Co., Ltd. and 77 Credit Services Co., Ltd., with of Reiwa, we will continue to walk together with the region. The 77th Card Co., Ltd. as the surviving company

December 1878 October 1972 Started operations as The 77th National Bank Shares listed (Second Section of the Tokyo Stock Exchange and the Sapporo Securities Exchange)

November 1974 2010 April 2018 Established 77 Lease Co., Ltd. Start of the Medium-term Management Plan “For The Customer & For The Future”—Best Consulting Bank Project— September 1977 Current Head Office July 2018 2000 Established 77 Research and Consulting Co., Ltd. Head Office relocated October 1985 Head Office at the time of our to a new building at Opened the London foundation in 1878 Chuo Representative Office November 2006 (former Hinoya site) January 1932 3-chome Established the Aomori The current The 77 Bank, Ltd. was 1990 Corporate Sales Office established through the merger of The 77 April 1998 May 1893 Bank, Tohoku Jitsugyo Bank, and Gojo Bank Established 77 Business Support Foundation Established Miyagi Savings Bank 1980 January 2016 (Renamed Gojo Bank in 1921) Started operation of the common use system (MEJAR) June 1910 February 1983 May 2016 Established Tohoku 1970 December 1997 July 2005 Established The 77 Card Co., Ltd. Opened the Singapore Representative Office Jitsugyo Bank, Ltd. Established 77 Credit Opened the July 2016 Building housing the Singapore 1960 Services Co., Ltd. Representative Office August 1973 April 1988 Established 77 Capital Co., Ltd. Representative Office Share listing changed to the First Opened the New York July 2016 Section of the Tokyo Stock Exchange Representative Office Established 77 Securities Preparatory Establishment Co., Ltd. October 1988 (trading name was changed to 77 Securities Co., Ltd. in May 1961 October 1978 Increased capital to January 2017) March 1898 The Bank Creed established as the Established 77 Shin-Yo Hosyo Co., Ltd. ¥22.2 billion September 2016 Name changed to The 77 Bank, Ltd. basic principle of management December 1978 Established the Hachinohe Corporate Sales Office July 1882 Celebrated the 100th anniversary of our November 2016 Opened the founding. Increased capital to ¥12.0 billion Converted 77 Lease Co., Ltd., 77 Shin-Yo Hosyo Co., Ltd., Tokyo Branch and The 77 Card Co., Ltd. into wholly-owned subsidiaries November 1990 Building housing the Upgrade the New York Representative Office to the Shanghai Representative Tokyo Branch Office Shibusawa warehouse during the Meiji era, where the first New York Branch Tokyo Branch of The 77th National Bank was located

Sources of competitive advantages ① Deep connection with Eiichi Shibusawa 1 Effective Corporate Governance 2 Trust from the local community Eiichi Shibusawa, a businessman who was known as “the father of Japanese capitalism,” had a strong interest in the Tohoku region through Munenari Date, who provided him with the opportunity to enter the Ministry of Finance. In order to improve the effectiveness of the Board of The Bank is supported by many customers, as At the time, there was no bank based in Miyagi Prefecture and for this reason, when The 77th National Bank was Directors through the diversification of Directors, the Bank is seen by the high percentages of approximately established, Shibusawa not only provided investment and various advice regarding such matters as the nature of proactively appointing Outside Directors and female 55% deposit share and approximately 43% the banking business and basic management concepts, he also seconded exceptional talent including Keishi Directors, and the ratios of Outside Directors and female Endo (the second and fourth President) and Seikei Ono from The Dai-Ichi Bank Limited. loans and bills discounted share in Miyagi Furthermore, Shibusawa provided both mental and practical support to the Bank over many years, including his Directors now stand at 41.1% and 11.7%, respectively. Prefecture. transfer of The Dai-Ichi Bank Limited’s banking business in Miyagi Prefecture to The 77th National Bank and his appointment as Advisor in 1908. Eiichi Shibusawa’s spirit of “harmony of morality and the economy” lives on today Eiichi Shibusawa in the line from the Bank Creed, which describes the Bank’s management philosophy, that states “the Bank’s progress goes hand in hand with prosperity in the local community.” Strengths of The 77 Bank, Ltd. ② Trust relationship with the Tokyo Stock Exchange The Tokyo Stock Exchange (currently Tokyo Stock Exchange, Inc.), which was established in May 1878, along with an increase in trading volume, in 1894 designated The 77th National Bank as the only bank among many to handle receipts and disbursements operations (*) for all trades of shares cleared. 3 Strong partnerships with the region and customers through The reasons for this designation include a recommendation from Eiichi Shibusawa and the provision of relief earthquake reconstruction support financing to the Tokyo Stock Exchange during a stock market crash caused by a recession when Seikei Ono, who became the fifth president, was manager of the Tokyo Branch, which rescued the exchange. On March 11, 2011, unprecedented damage was caused when the Great East Over the next 120 years and to the present, The 77 Bank, Ltd. remains the only regional bank designated as a Earthquake, one of the largest recorded natural disasters in our history, struck Japan. funds settlement bank, alongside the mega banks. Seikei Ono Immediately after the earthquake, The 77 Bank, Ltd. worked to provide financial * Receipts and disbursements operations refers to account processing for the trading floor of a stock exchange 5th President infrastructure and fulfill financial intermediary functions, and has since provided Onagawacho financial support for the reconstruction efforts of the region and customers.

3 THE 77 BANK INTEGRATED REPORT THE 77 BANK INTEGRATED REPORT 4 Message from the President About The 77 Bank, Ltd.

“For The Customer & For The Future” Becoming the “Best Consulting Bank” Strategies of The 77 Bank, Ltd.

We will further enhance the degree of customer satisfaction and confidence in the Bank through consulting, offering the optimum solutions by identifying customers’ needs and issues. Hidefumi Kobayashi Operations that Put Customers First President Social Contribution Activities

Review of the First Year of the Medium-term Management Plan To that end, as we pass the milestone year of our initiatives that are based on the actual or potential needs anniversary, I feel even more strongly the need to further of customers. In order to carry out consulting, it is 1. Celebrating the 140th anniversary of the Bank’s Looking back over the past thirty years that have formed enhance our ability to respond to the changes of the era, necessary to make frequent visits to customers and use foundation the Heisei era, the environments surrounding finance and while enriching our ideas and proactively researching and our ingenuity. This is not something that can be achieved

FY2019 was a memorable year for the Bank during which the Japanese economy have undergone significant preparing for the new experiences that lie ahead. overnight but involves time-consuming effort, and that is Bank Data we started our new three-year Medium-term change. With the collapse of the “bubble” economy, the exactly why it will be appreciated by customers and lead Management Plan and, in December 2018, celebrated issue of bad debt disposal, deregulation such as the 2. Consulting by the Bank to differentiation with other banks. the 140th anniversary of the Bank’s foundation. financial Big Bang, the bankruptcy of Lehman Brothers and The Medium-term Management Plan that we started in It is a rewarding business model which enables us to We held a number of commemorative projects to mark more, the environment surrounding financial institutions has FY2019 stipulates a business model whereby we further share issues face to face with customers, and utilize our our 140th anniversary, including the “One branch, one become increasingly harsh as Japan’s economic growth enhance the degree of customer satisfaction and ingenuity to think how to be of use to customers, deal social contribution campaign,” whereby all branches has slowed, and today we are entering a new phase of confidence in the Bank, and achieve higher profitability with difficulties together, and reach a resolution. I believe engage in social contribution activities, and business monetary easing and negative interest rates. and employee satisfaction through consulting. that consulting-based sales will enrich all customers and forums which were held with the aim of expanding Many areas of the economy, not just finance, have Consulting is about “always putting the customer first” the local community, regardless of whether the customers business opportunities for customers and contributing to undergone significant change due to globalization and and “being of use to the customer,” as well as the are corporate or retail customers. regional economy vitalization, as well as some new exposure to the market economy. I believe that in the resulting initiatives that lead to the Bank’s earnings. It is a As the nation’s declining birthrate, aging population and initiatives such as business contests to collect IT-based future, with the addition of the further progress of business model whereby we demonstrate our consulting population decline continue, the biggest concerns for service models and ideas from startup companies, digitalization, we will face even greater changes at an capabilities in order to achieve goals and resolve small and medium enterprises (SMEs) are the lack of announcement of the official mascot “Shichi-Shika-Kun,” accelerated pace. development and growth issues by establishing successors and business succession. If these trends and renovation of the Currency and Banking Museum. Under these circumstances, as a leading bank in the relationships with customers and conducting business continue, it is said that one third of SMEs will go out of By engaging with the local community in a way that Tohoku region that provides integrated , evaluations in the case of corporate clients and becoming business. Ninety nine percent of Japanese corporations surpassed previous efforts, we were able to further in order to create an outstanding business model, be the involved with household finances and life planning in the are SMEs, and if the number of SMEs continues to strengthen our connection with customers and the local most useful and the most trusted by our customers and case of retail customers, so that we can contribute to our decline, the niche areas that are not covered by large community, as well as reaffirm the Bank’s history. Above the region, and to continue to contribute to the customers while at the same time achieve increased corporations will no longer be filled, possibly resulting in all, I believe that we were able to convey our gratitude to development of society, we must respond to the changing transactions and earnings overall. the decline and collapse of local industries and the loss of our customers. times even more quickly and astutely and regard those The main point of consulting is not simply the products jobs in local communities. This will lead to a crisis changes as opportunities. and services that the Bank wants to sell; it is about whereby the regional banking market, which includes the

5 THE 77 BANK INTEGRATED REPORT THE 77 BANK INTEGRATED REPORT 6 Bank, shrinks and disappears, which will in turn have a The weekday evening seminars that we launched in Key Strategy 4: Governance strategy Message to stakeholders major impact on regional revitalization. FY2019 as part of our working style reforms have been —Strengthening of governance for sustainable growth— In addition, the coastal areas in Miyagi Prefecture have held on seven occasions with 807 participants. In April this year, the government announced that the entered the development period of the Miyagi Prefecture portrait of Eiichi Shibusawa would be used on ¥10,000

Earthquake Disaster Recovery Plan. However, as the In light of the increasing international importance of bills scheduled to be issued in 2024. Eiichi Shibusawa, About The 77 Bank, Ltd. reconstruction budget has shrunk, there are companies All businesses receive consideration for responding to the preventing money laundering and financing of terrorism, who is also known as “the father of Japanese capitalism,” among our clients whose sales channels have not various needs of customers. It is customers who bring we established the Money Laundering Countermeasures has an extremely deep connection with the Bank, as seen recovered, while other companies are facing issues of the profits to banks, and knowing your customers well, Department, and also formulated the Policy for Prevention in his support, both mental and practical, at the time of aging of their employees, a shortage of labor, and a lack broadly capturing their needs, and considering how to of Money Laundering. the Bank’s foundation. of successors. In order to recover from the earthquake meet those needs are fundamental to considering a In addition, as part of measures to strengthen The “harmony of morality and the economy” advocated disaster, we must focus on corporate rehabilitation, business model. Business evaluations are also conducted corporate governance, we increased the number of by Shibusawa is the idea of the coexistence of profit and business succession, and M&A, which is also a measure for this purpose, and it is important to give thorough Outside Directors serving as Audit & Supervisory public interest that warns against a monopoly on profits that provides a solution to these issues. consideration to our customers. Committee Members by one in order to enhance the and encourages the return of profits to society. This spirit Local industry and finance are two sides of the same The number of business evaluations conducted as of management oversight functions of the Audit & is one of the models that corporate managers should use Strategies of The 77 Bank, Ltd. coin. Through consulting-based sales utilizing the Bank’s March 31, 2019 increased by 1,723 compared with the Supervisory Committee and establish a more effective as reference, and I believe that it also leads to the idea of network, we will protect the regional economy, regional number as of March 31, 2018 to 4,978 evaluations. Since corporate governance system. the Sustainable Development Goals (SDGs) that are companies, and our market. we share a great many management issues with our As a result of these efforts, the ratio of Outside promoted by the United Nations. customers, we would like to contribute to the sustainable Directors now stands at 41.1% and the ratio of female Shibusawa’s spirit of coexistence is reflected in the line 3. Initiatives for our key strategies growth and development of customers by way of Directors at 11.7%. from the Bank Creed, which is the Bank’s management Key Strategy 1: Growth strategy initiatives aimed at resolving these issues. philosophy, that states “the Bank’s progress goes hand in —Strengthening of profitability— hand with prosperity in the local community.” Today this Key Strategy 2: Regional economy vitalization strategy With regard to shareholder returns, the Bank’s basic lives on in the hearts of all our executives and employees. We have engaged in earthquake reconstruction support holistically considering the public nature of banks and the becoming increasingly severe due to social structural In order to improve the sales promotion structure of in accordance with the situation in the affected area, while maintenance of sound management. issues such as the declining birthrate, aging population Operations that Put Customers First Headquarters, the name of the Corporate & Retail taking into consideration the change in the stage of the For the fiscal year ended March 31, 2019, we and population decline, and the continuation of the Banking Division was changed to Consulting Promotion Miyagi Prefecture Earthquake Disaster Recovery Plan increased the annual dividend by ¥2.50 per share from monetary easing policy by the Bank of Japan. I believe Division, and the Corporate Finance Department, which from the regeneration to the development period, and the previous fiscal year to ¥47.50 per share from the that it is precisely because this is the era in which we live offers financing services for corporate clients, including trends in reconstruction demand. perspectives of comprehensively taking into consideration that we must once again go back to our management syndicated loans and structured finance, was established. Regional revitalization involved initiatives for the business performance and enhancing shareholder philosophy, develop a business model that has its roots in In addition, the name of the Asset Management Support revitalization of towns, people, and jobs. With a focus on returns. The annual dividend for the fiscal year ending the region, and contribute to the prosperity of the local Department was changed to the Consulting Promotion the creation of jobs, we worked on four frameworks: March 31, 2020 is expected to be ¥50.00 per share. community. Department to develop a structure that can support a support for starting new companies and businesses, In addition, the Bank has acquired treasury stock of Going forward, we will continue to aim to be a bank wide range of customer needs including business support and development of regional core companies, approximately ¥800 million from the perspective of that is trusted, useful, and brings happiness to all our succession, M&As, inheritance, and asset management. promotion of urban development, and support for implementing flexible capital policies and returning profits customers, and we hope for your continued Social Contribution Activities Furthermore, branches have been categorized into six promotion of tourism. In addition to support for starting to shareholders. understanding and support. areas within Miyagi Prefecture, and Region Support Team new companies and businesses through Going forward, we will continue to enhance shareholder staffed by liaison personnel from the Consulting recommendations to companies that will drive the future returns, including through the acquisition of treasury Promotion Division in each area was formed in order to of the region, there are also many other good examples stock, taking into account changes in the business strengthen the support system for branches by such as business matching that also leads to PR for environment. Headquarters. products from Miyagi Prefecture, support for formulation In addition to these system improvements, the number of business plans utilizing former schools, and support for of sales personnel in the Consulting Promotion Division enhancing tourism resources. was increased from 42 prior to the start of the current Medium-term Management Plan to 68 as of March 31, Key Strategy 3: Productivity enhancement strategy 2019, and will be further increased to approximately 80 —Effective and efficient allocation of resources— by March 31, 2020. The Nozomino Sub-Branch, a next generation branch, Additionally, 77 Research and Consulting Co., Ltd. was was established in order to secure manpower and time to established as a subsidiary to undertake highly focus on consulting services, while branches introducing Bank Data specialized research studies involving the regional next generation branch functions, including a remote economy and industry trends, etc. and to provide consultation system and the use of tablets, were effective consulting services for resolving clients’ issues. expanded. In addition to reviewing business hours, we also expanded operations in the form of branches within branches. When it comes to “putting the customer first,” I believe Furthermore, we are working to automate operations that customers will not be satisfied with digital services by centralizing branch operations at Headquarters, alone, and I do not believe that there will no longer be a reviewing administrative workflow, and introducing RPA need for services provided by people. There are still many (robotics process automation), thereby creating a services that must be provided by human beings, reduction effect of approximately 85,000 hours per including business such as sales activities and annum. negotiations with customers, and planning and In terms of working style reforms, we formulated the management operations, and I believe that the quality and “health and productivity management declaration” to level of our employees will result in differentiation with our establish an environment where each and every employee competitors. Education for this purpose is essential, and can work actively in a healthy state of mind and body, and we have therefore formulated human resources implemented initiatives including a total prohibition of development programs to enhance consulting smoking on all Bank property. capabilities, and are working on human resources development.

7 THE 77 BANK INTEGRATED REPORT THE 77 BANK INTEGRATED REPORT 8 Financial and Non-financial Highlights

Financial information

ross operating income Operating incomeCore operating income Balance of deposits and certificates of deposit Balance of loans and bills discounted About The 77 Bank, Ltd. Balance of deposits and certificates of deposit Balance of loans and bills discounted (Billions of yen) (Billions of yen) Operating income Core operating income (Billions of yen) Of which, balance of deposits and certificates of deposit in Miyagi Prefecture (Billions of yen) Of which, balance of loans and bills discounted in Miyagi Prefecture

100.0 30.0 8,000.0 7,971.2 7,9.3 ,000.0 7,91. 7,8.9 7,821. ,27.1 ,72.0 ,0.3 80.1 ,37.9 23.2 23.1 ,227.7 7.1 23.0 7,03.2 7,3.8 7,38.7 7,33.0 7,1.2 ,000.0 9.2 7.7 9.2 20. 19.2 18.7 3,38.9 ,2.2 20.0 7,000.0 3,1. 1.0 1. 1.9 3,000.0 2,917.7 3,027.2 1.2 Strategies of The 77 Bank, Ltd. 0.0

2,000.0 10.0 ,000.0

1,000.0

0 3 3 73 3 3 0 3 3 73 3 3 0 March 31, March 31, March 31, March 31, March 31, 0 March 31, March 31, March 31, March 31, March 31, 2015 2016 2017 2018 2019 7 Operations that Put Customers First

Ordinar incomeet income eference Creditrelated epenses trends Deposits and loans and bills discounted share in iagi Prefecture Provision of general reserve Gains on reversal of reserve for possible loan losses for possible loan losses (Billions of yen) Ordinary income Net income (Billions of yen) Gains on reversal of reserve Bad debt disposals for contingent losses D P (As of March 31, 2019) P (As of March 31, 2019)

0.0 10.0 (%) (%)

30. Other 6.6 Other 6.5

30.0 Shinkin banks 7.7 2.3 2. 2. Shinkin banks 9.7

23.3 Social Contribution Activities 21. 22.0 (3.8) 0.8 0. (.2)0. (1.) 0. (2.3) 17.9 20.0 1.9 1.7 0 (1.9) 0.2 Second-tier 1.7 1. (2.7) Second-tier T 77 B T 77 B regional banks 10.0 regional banks (.) (0.1) (.) (0.1) 13.5 Regional .9 2. (0.0) banks 5.0 10.0 Regional (0.1) Trust banks 4.4 banks 15.3 Trust banks 1.8 City banks, etc. 9.4 0 3 3 73 3 3 -10.0 3 3 73 3 3 City banks, etc. 12.6 * Excludes JAPAN POST BANK and agricultural and fishery cooperatives * Excludes agricultural and fishery cooperatives (Note) From the fiscal year ended March 31, 2015 through the fiscal year ended March 31, 2018, gains on reversal of reserve for possible loan losses and gains on reversal of reserve for contingent losses were recorded, as the total general reserve for possible loan losses and the specific reserve for possible loan losses, as well as gains on reserve for contingent losses were reversed. Bank Data Capital adeuac ratio domestic standards ating (as of July 31, 2019) Balance of assets in custod Securities balance Investment trusts Public bonds Stocks Others Category Insurance Foreign currency deposits Bonds () AAA (Billions of yen) High Aaa (Billions of yen) Structured bonds, etc. ating Certainty of ful llment obligations Rating agency 1 800.0 ,000.0 3,83. AA De nition Aa 701. 12. 3,78.9 100.2 2.1 12.2 3,22. 3,12.0 12.19 A Japan Credit Long-term issuer rating 3,029. A 1. 19. Rating 107. 2,787.1 11.0 2,9.9 10.90 73.0 10.8 BBB Agency, Ltd. AA 1.1 2,. 17. 12 10.18 10.20 00.0 2.9 108. 3,000.0 2,330. (JCR) Very high certainty of ful llment of obligations Baa 97.1 28.0 90. 2,19. BB 300.1 Rating and Issuer credit rating Ba 309.8 2. B Investment A 8 Information, Inc. B 00.0 2,000.0 CCC (R&I) High credibility and partially superior performance 330.3 Caa CC 237.1 Long-term deposit rating 17.7 C Moody’s Ca 200.0 133.8 1,000.0 107. Investors A2 . 3.0 3.9 7. B III Low Service, Inc. 11. D Judged to be upper in the middle class, with low credit risk C 13. 1.8 1.8 18.1 1. 1.7 .7 17. 1.2 2.9

0 March 31, March 31, March 31, March 31, March 31, Notes: 0 March 31, March 31, March 31, March 31, March 31, 0 March 31, March 31, March 31, March 31, March 31, 7 1. Some rating agencies do not use D. 7 7 2. Ratings from level AA to level CCC (including level B by some * Foreign currency deposits do not include deposits by financial institutions and offshore accounts. agencies) are further qualified with the use of a + or – sign, or 1 through 3.

9 THE 77 BANK INTEGRATED REPORT THE 77 BANK INTEGRATED REPORT 10 Financial information Non-financial information

Status of loans in iagi Prefecture Loans to Ss

Financial intermediation About The 77 Bank, Ltd. B P B E E

Balance of loans and bills discounted atio of loans in the prefecture Balance of loans to SMs Of which, balance of loans to SMs in Miyagi Prefecture umber of clients evaluated atio of the number of clients ho are proposed Of which, loans in Miyagi Prefecture atio of loans to SMs atio of loans to SMs in Miyagi Prefecture ,97 (Clients) ith solutions to all clients (Billions of yen, ) (Billions of yen, ) 1,2. 3,2 () . ,27.1 ,72.0 1,77 ,000.0 ,0.3 100 1,800.0 1,71. 0 ,227.7 ,37.9 1,.2 March 31, March 31, March 31, 32.1 ,000.0 80 72. 7 72. 1,00.0 1,19. 9.0 9. 70.9 ,2.2 3,1. 3,38.9 Strategies of The 77 Bank, Ltd. 2,917.7 3,027.2 0 1,12.1 Balance of loans to clients evaluated 3,000.0 39. 39.9 0. 71. 23.0 1,00.0 37.3 0 (Billions of yen) 37.0 37.9 38. 3. 2,000.0 0 3.7 3.9 01.1 March 31, March 31, March 31, 1,33. 1,9. 7 1,200.0 33. 1,2. 3 March 31, March 31, March 31, 1,000.0 20 1,130.0 * Core business support, financial support, support for management plan formulation, start-up support, 1,01. 7 marketing channel development support, M&A support, business succession support

0 March 31, March 31, March 31, March 31, March 31, 0 0 March 31, March 31, March 31, March 31, March 31, 0 7 7 umber of startup support proects umber of business succession support clients (Cases) (Clients) 0 Operations that Put Customers First

Status of loans to retail customers Status of loans b industr 818 37 (Billions of yen, ) B Balance of loans b industr Balance of loans and bills Of hich, iagi 7 17 Balance of loans to retail customers Balance of housing loans As of arch , discounted Prefecture Percentage Of which, balance of loans to retail customers in Miyagi Prefecture Of which, balance of housing loans in Miyagi Prefecture anufacturing 20.0 179.9 2.8 1,1.2 (Billions of yen) Agriculture and forestr . . 8. 1,09. F7 F F F7 F F 1,0.7 Fisheries .0 .9 99. 1,100.0 1,08.9 ining and uarring of stones and gravel 3.7 1.1 31.3 1,012. 1,08.1 1,09.0 1,0.7 Construction * Start-up plan formulation support, financing clients in the start-up stage, introduction of government-affiliated * Implementation of treasury stock evaluation, support for shareholder succession measures, introduction of external experts on business 98.8 1,011.8 13. 130.0 8. 1,000.0 financial institutions and start-up support organizations, subsidies, financing, and investment in venture companies succession, utilization of Guidelines for Personal Guarantee Provided by Business Owners Management Guarantees for successors Social Contribution Activities 931. 977. lectricit, gas, heat suppl and ater 192.7 19.3 82.7 88.0 891.3 93.3 nformation and communications 29.2 .9 23.7 900.0 902.3 Transport and postal activities 127.7 72.0 . 827. 80.9 8. holesale and retail trade 38. 28. 9.9 umber of A advisor contract clients umber of 77 Business atching Service 80. Finance and insurance 30.9 100.2 32.8 800.0 (Clients) contracts closed eal estate and goods rental and leasing 979. 77.9 9.0 (Cases) Other services 31.2 280.3 82.1 700.0 unicipal governments 0.7 . 8.0 2 Other 1,13.2 1,093.0 9. 32 1 0 March 31, March 31, March 31, March 31, March 31, Total ,7. ,. 7. 10 290 7 The breakdowns of the balance of loans by industry have been rounded down to the unit displayed.

F7 F F F7 F F Bank Data

Status of credit disclosed under the Financial econstruction Act and riskmonitored loans * Service in which the Bank’s business partners are introduced in order to resolve customer issues

(As of March 31, 2019, Billions of yen) Credits disclosed under the Financial econstruction Act Credit disclosed under the Financial Reconstruction Act Loans to bankrupt and uasibankrupt Risk-monitored loans (Scope: credit related accounts, only loans and bills discounted for substandard loans) Loans to borrowers that have fallen into, or effectively fallen into bankruptcy, and other loans equivalent thereto (Scope: loans and bills discounted) Doubtful loans Classi cation Total coverage Coverage ratio Loans to borrowers that are not bankrupt, but for which there is a high likelihood of not being able to reclaim the principal umber of overseas business support provided atio of number of clients using uidelines for Personal uarantee Provided Loans to bankrupt borrowers Loans to bankrupt and or collect interest according to the contract, due to a deterioration of business results or financial position 4.8 quasi-bankrupt 15.3 100% Substandard loans (Cases) b Business Oners anagement uarantees to all borroers 15.3 1,07 () 1. Delinquent loans Loans past due 3 months or more or restructured loans other than those in (1) or (2) Doubtful loans 48.4 89.8% 63.8 ormal loans 53.9 Loans other than those in (1) to (3) for which there are no particular issues in the business results or financial position of Loans past due 3 months or more the borrower 1,290 1.9 Substandard loans 1.9 iskmonitored loans 26.8 14.5 54.2% Restructured loans Loans to bankrupt borroers 24.9 712 Loans for which interest receivable has not been recorded for borrowers that have conducted legal proceedings, such as 11.3 Subtotal Total those under the Bankruptcy Act, and for which transactions have been suspended by a business partner or clearinghouse 78.2 81.5% 96.0 95.4 Delinuent loans Loans for which interest receivable has not been recorded (excluding loans in (1) and loans for which interest payments Normal loans have been extended due to restructuring or support of the management of the borrower) F7 F F March 31, March 31, March 31, 4,680.7 Loans past due months or more 7 Loans for which payments of the principal or interest are past due 3 months or more from the day following the prescribed payment date (excluding (1) and (2)) * Overseas expansion support, marketing channel development and procurement support, provision of estructured loans overseas information, etc. Total Loans for which favorable terms have been provided to the borrower or restructuring or support of the management of the 4,776.7 borrower, such as a reduction of interest, an interest payment extension, or waiver of a claim (excluding (1) to (3))

11 THE 77 BANK INTEGRATED REPORT THE 77 BANK INTEGRATED REPORT 12 Non-financial information

(Initiatives for operations that put customers first … Page 63)

Customer-focused measures About The 77 Bank, Ltd.

umber of seminars held for customers and number of participants umber of 77 Savings nvestment Trust contract holders umber of taeempt accounts SA, etc. opened Number of employees who have acquired qualifications such as 1st grade Certified Financial Planner, CFP, 2nd grade Certified Financial Planner, and Affiliated Financial Planner (AFP) (Times, people) Number of seminars held Number of participants (People) (Cases) 1,1 0, (People) 2,279 ,07 17

11,838 2,871 2,13

23,7 2,039 Strategies of The 77 Bank, Ltd. 2,198 1,8 11,309 9 71

F7 F F March March March March March March March March March 7 7 2017 2018 2019

Human resources (Working style reform efforts…Page 49) Social contribution activities (Social contribution activities…Page 69) Operations that Put Customers First Percentage of women engaged in consulting services Percentage of women in management positions [Environment] [Contribution to social welfare]

() () Sales of <77> ESG Japan Stock Cooperation in blood donation projects Open (Miyagi no Kizuna) (*) through corporate blood donation campaign 37.8 37.1 12.8 13.2 Number of blood donors 3.8 11. 713 cases/¥1,169 million (FY2019) 294 Social Contribution Activities March 31, March 31, March 31, March 31, March 31, March 31, * An investment trust product we started handling in July 2018 in commemoration of the 140th (FY2019) 7 7 anniversary of our founding. Part of the trust fees the Bank receives is donated to activities to reproduce coastal protection forests that were damaged destructively by the earthquake.

In-house attorneys Usage of annual paid leave [Financial education] [Financial education] ￥ Number of participants in courses Number of visitors to Currency () 2 provided by Tohoku Gakuin and Banking Museum (*) In-house certified 73.8 University public accountants 1,159 2 73.2 (FY2019)

272 Bank Data 72. Small and medium (FY2019) enterprise management consultants 33 * An archives center opened at the Bank’s Head Office in 1998, in commemoration of the 120th F7 F F anniversary of our founding, to introduce the history and roles of money and banks, etc. It was (As of March 31, 2019) reopened after renovation in March 2019 in commemoration of the 140th anniversary of our founding.

Number of employees qualified as Service Care Attendant Number of employees who participated in training course [Cultural activities support] [Cultural activities support] (People) for Supporters of People who Suffer from Dementia (*) (*) (People) 1,9 77 Fureai Concert Starlight Symphony (FY1993 to FY2019) (FY1992 to FY2019)

1,89 39 39 1,709 58 times 27 times

March 31, March 31, March 31, March 31, March 31, March 31, 7 7 * A concert that provides local elementary and junior high school students with an opportunity to see a live concert * Charity concert held to enliven the Sendai Pageant of Starlight

13 THE 77 BANK INTEGRATED REPORT THE 77 BANK INTEGRATED REPORT 14