THE AKITA BANK, LTD.

The bank gathers ¥2,122,300 million in individual deposits and ¥776,200 million in corporate deposits through a network of 98 branches including the head office. Of the ¥2,132,846 million in loans outstanding at term-end, the ratio of loans to SMEs and others is maintained at 54.03%, and the customer base deeply penetrated among both regional businesses and individuals constitutes a unique asset that is difficult for competitors to replicate in a short period.

The custodial assets balance expanded rapidly to ¥273,848 million (up ¥33,579 million, +14.0% from the previous term-end). The bank holds multiple non-financial functions that leverage the parent bank's customer base, including export support for Taiwan and Hong Kong through the regional trading company "Uta no Kuni Akita," the job-hunting site "Career Pita AKITA," business succession and M&A support, and the startup support program "Scrum."

The non-performing loan ratio was 2.40% as of the end of March 2026 (down 0.31pt from the previous term-end). Doubtful receivables decreased from ¥45,975 million to ¥38,148 million, and credit-related costs improved significantly from an expense of ¥2,787 million to a reversal gain of ¥161 million. The consolidated capital adequacy ratio was maintained at 11.26% (domestic standard), indicating a high level of financial soundness.

The Company will continue to expand the average balance of loans (¥2,103.6 billion in FY2025, up ¥100.7 billion year on year) and improve yields (1.19%), aiming to maximize net interest income amid rising interest rates. Regarding securities, the Company will increase its holdings of Japanese government bonds to ¥178,871 million (up ¥35,180 million from the previous fiscal year-end) while strengthening interest rate risk management through the use of deferred hedges. Core net business income for FY2026 is projected at ¥15,500 million (a decrease year on year), reflecting a temporary adjustment, but the Company aims to sustain the effects of yield improvement over the medium to long term.

The balance of custodial assets, comprising investment trusts, life insurance, and public bonds, was expanded to ¥273,848 million (up ¥33,579 million, or +14.0%, from the previous fiscal year-end), with sales during the period reaching ¥58.3 billion (up ¥7.9 billion year on year). Through the steady accumulation of fees and commissions income, the Company will promote reduced reliance on net interest income and diversify revenue sources. In parallel, it will expand Regional Value Co-Creation Service revenue generated by its group of subsidiaries (Regional Trading, Consulting, Fund Management, etc.).

While maintaining asset soundness, as evidenced by the non-performing loan ratio of 2.40% (down 0.31pt from the previous fiscal year-end) and the shift of credit-related costs to a net reversal, the Company aims to strengthen its capital base through profit accumulation in response to the expansion of risk assets (¥1,348.7 billion, up ¥96.3 billion from the previous fiscal year-end) accompanying loan growth. The capital adequacy ratio (domestic standard) stands at 11.17%, well above the regulatory requirement, though down 0.62pt from the previous fiscal year-end, making the balance between capital efficiency and soundness a key challenge.

The Company targets a dividend payout ratio of 40% or more and continues to increase dividends, with an annual dividend of ¥175 per share in FY2025 (up ¥70 year on year) and a projected ¥200 per share in FY2026 (up ¥25 year on year). It implemented a year-end dividend increase from the initial forecast of ¥75 to ¥100 (up ¥25), executing its policy of increasing dividends per share through profit growth. Share buybacks will be conducted flexibly, provided capital adequacy is maintained; in FY2025, the Company repurchased ¥122 million worth of shares.