Procrea Holdings, Inc.

Aomori Michinoku Bank is the only regional bank headquartered in Aomori Prefecture, with a customer base of ¥5,051,663 million in deposits and ¥3,495,123 million in loans outstanding. It broadly covers individuals, corporations, and public entities (loans to government and local public bodies account for 27.93% of the loan composition), having built a community-based sales network that is difficult for competitors to replicate in a short period.

Following the merger of Aomori Bank and Michinoku Bank in January 2025, 14 branches were consolidated in September 2025. Through the introduction of a unit-based sales system and a review of the head office organization, operating expenses were reduced to ¥41,618 million, down ¥3,429 million from the previous consolidated fiscal year. This cost reduction effect directly contributed to a ¥4,125 million increase in ordinary profit compared to the previous year, confirming it as a concrete result of the merger synergies.

The balance of assets under custody, including investment trusts and insurance, reached ¥557,467 million (up ¥32,483 million from the end of the previous fiscal year), reflecting the expansion of the Fee Business. In addition to Banking, Leasing (segment profit of ¥635 million) and Credit Card, Credit Guarantee, Consulting, and Debt Collection Business (combined segment profit of ¥820 million) supplement earnings, giving the group a structure that diversifies the risk of dependence on a single business.

Following the completion of the merger between Aomori Bank and Michinoku Bank in January 2025, cost-reduction synergies materialized in FY2025 as a ¥3,429 million reduction in operating expenses. For FY2026, the Bank plans ordinary income of ¥11,300 million (up 72.3% year on year), driven by increased interest income and improved securities-related gains/losses. The full realization of merger synergies is the primary driver of revenue expansion.

Against the backdrop of the Bank of Japan's expected continued additional rate hikes, the Bank aims to expand interest income through increases in loan yield (1.23%), securities yield (1.03%), and interest on deposits placed. For FY2026, further expansion of interest income is expected, mainly driven by an increase in interest on loans. Meanwhile, amid the continued decline in personal loans and public-sector lending, growth in business loans (up ¥22,797 million from the end of the previous fiscal year) is supporting the loan balance.

The balance of assets under custody, including investment trusts, public bonds, and insurance, has been on an increasing trend, reaching ¥557,467 million (up ¥32,483 million from the end of the previous fiscal year). The investment trust balance in particular grew significantly to ¥142,328 million (up ¥22,030 million). The Bank aims to capture individual customers' asset-formation needs and steadily build up fee income. Fees and commissions income was ¥12,248 million, a slight decrease year on year, but the growth in assets under custody forms the foundation for medium- to long-term fee income.

At the Board of Directors meeting on May 15, 2026, the dividend payout ratio target was raised to approximately 40%, and the annual dividend forecast for FY2026 was set at ¥100 per share (an increase of ¥50 from the previous fiscal year). This represents an enhanced shareholder return measure in light of future growth driven by the full realization of merger synergies, with the new policy applying from FY2026 (fiscal year ending March 2027).