THE HYAKUGO BANK, LTD./Financial Review


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	Six-Year Summary (Consolidated) Six-Year Summary (Non-Consolidated)


	Message from the President Wisdom-Based Innovation 2009 Increasing Income Corporate Governance Current Status of Nonperforming Loans Financial Review Financial Section Corporate Data and Investor Information

Consolidated Financial Condition

Income
For the year ended March 31, 2007, consolidated total income decreased ¥2,683 million (2.9 percent) year-on-year to ¥89,016 million, due to factors including decreases in interest on securities and proceeds from sales of securities. Total expenses increased ¥639 million (0.9 percent) year-on-year to ¥72,187 million, because of factors including an increase in interest paid on deposits.

Net income decreased ¥1,846 million (16.0 percent) year-on-year to ¥9,680 million.

Net Interest Margin (Non-Consolidated)

Millions of yen

2007

2006

Increase
(decrease)

Interest income

¥ 61,306

¥ 62,597

¥ (1,291

)

Average interest-earning assets

3,619,716

3,537,351

82,365

Average interest rate of interest-earning assets (%)

1.69

1.76

(0.07

)

Interest expense

7,614

4,298

3,315

Average interest-bearing liabilities

3,506,398

3,425,986

80,412

Average interest rate of interest-bearing liabilities (%)

0.21

0.12

0.09

Net interest income

53,692

58,299

(4,606

)

Funding cost (%)

1.38

1.31

0.07

Net interest margin (%)

0.31

0.45

(0.14

)


Note:	Figures for average interest-bearing liabilities are presented after deducting the average outstanding balance of money held in trust and interests.

Deposits and Certificates of Deposit
As of March 31, 2007, total deposits and negotiable certificates of deposit increased ¥126,715 million (3.7 percent) from a year earlier to ¥3,531,872 million, due to solid increases in individual and government deposits.

Deposits by Depositor (Non-Consolidated)
	Millions of yen
	2007	2006	Increase (decrease)
Individuals	¥2,677,349	¥2,582,897	¥ 94,452
Corporations	645,428	631,780	13,647
Governments	176,720	165,822	10,897
Financial institutions	37,098	27,415	9,682
Total	¥3,536,597	¥3,407,916	¥128,680

Loans
The balance of loans and bills discounted at the end of the fiscal year increased ¥87,053 million (4.2 percent) from a year earlier to ¥2,143,115 million. Factors included an increase in loans to corporate customers.

Loans to Individuals (Non-Consolidated)

Millions of yen

2007

2006

2005

2004

2003

2007/2006
Increase
(decrease)

Balance of loans to individuals

¥550,166

¥542,556

¥534,879

¥528,168

¥495,858

¥ 7,610

Balance of loans to individuals in the region

550,152

542,512

534,746

527,992

495,659

7,640

Number of borrowers

113,312

118,070

120,601

124,121

126,946

(4,758

)

Number of borrowers in the region

113,265

118,015

120,530

124,036

126,853

(4,750

)

Loans to individuals as a percentage of total loans

25.6

26.3

26.8

26.5

24.5

(0.7

)

points

Loans to individuals in the region as a
percentage of total loans in the region

29.8

30.3

30.4

30.2

28.3

(0.5

)

Consumer Loans (Non-Consolidated)

Millions of yen

2007

2006

2005

2004

2003

2007/2006
Increase
(decrease)

Consumer loans

¥516,882

¥505,998

¥494,210

¥483,502

¥447,261

¥10,883

Housing loans

445,017

426,678

407,689

384,674

336,844

18,338

Securities and other

71,864

79,319

86,521

98,827

110,416

(7,454

)

Loans to Small and Medium-sized Companies (Non-Consolidated)

Millions of yen

2007

2006

2005

2004

2003

2007/2006
Increase
(decrease)

Balance of loans to small and medium-sized companies

¥923,311

¥890,616

¥893,898

¥901,335

¥955,746

¥32,694

Balance of loans to small and medium-sized companies in the region

868,074

844,446

858,514

867,142

926,486

23,628

Number of borrowers

15,572

15,444

15,449

16,140

17,533

128

Number of borrowers in the region

15,492

15,378

15,397

16,091

17,482

114

Loans to small and medium-sized companies as a percentage of total loans

43.0

43.2

44.8

45.3

47.1

(0.2

)

points

Loans to small and medium-sized companies in the
region as a percentage of total loans in the region

47.0

47.2

48.8

49.6

52.9

(0.2

)


Note:	1.	The above amounts do not include loans from Japan offshore market accounts.
	2.	Small and medium-sized companies are classified as those having capital of ¥300 million or less (¥100 million or less in the wholesale industry; ¥50 million or less in the retail and service industries) or those having 300 or fewer employees (100 or fewer in the wholesale industry; 50 or fewer in the retail industry and 100 or fewer in the service industry).


Outstanding Loans by Industry (Non-Consolidated)
	2007				2006
	Outstanding balance (Millions of yen)		Number of borrowers		Outstanding balance (Millions of yen)		Number of borrowers
	Total	Total in the region	Total	Total in the region	Total	Total in the region	Total	Total in the region
	2,148,322	1,847,966	129,390	129,057	2,061,044	1,790,100	134,003	133,680
Manufacturing	354,648	268,791	3,188	3,078	325,093	253,159	3,142	3,041
Agriculture	3,691	3,691	138	138	3,020	3,020	151	151
Forestry	5,061	5,061	58	58	5,961	5,961	64	64
Fishery	3,946	3,946	171	171	4,033	4,033	181	181
Mining	2,431	1,651	24	23	2,877	1,697	23	21
Construction	105,025	104,451	2,833	2,830	108,221	107,521	2,821	2,818
Utilities	21,435	20,431	46	45	18,902	17,794	46	44
Telecommunication	18,240	7,739	155	147	16,147	7,778	146	139
Communication	9,770	770	8	5	7,915	915	12	9
Transportation	104,022	81,987	558	542	93,511	72,781	538	525
Wholesale & Retail	283,256	254,300	3,528	3,496	280,571	253,357	3,587	3,554
Finance & Insurance	91,621	26,047	116	64	86,731	20,421	115	63
Real estate	180,674	134,778	1,288	1,257	170,873	127,725	1,178	1,153
Service industries	259,661	220,496	3,944	3,912	251,000	220,795	3,909	3,879
Restaurant	16,167	16,124	697	695	16,143	16,046	706	703
Local government	164,437	164,437	31	31	151,541	151,541	32	32
Other	550,166	550,152	113,312	113,265	542,556	542,512	118,070	118,015

Investment Securities
The balance of investment securities decreased ¥49,594 million (3.4 percent) from a year earlier to ¥1,411,211 million.

Capital Adequacy Ratio
Hyakugo Bank applies domestic standards for determining capital adequacy. As of March 31, 2007, the Bank’s capital adequacy ratio based on domestic standards was 10.89 percent, and the Tier I capital ratio was 8.63 percent. On a non-consolidated basis, the capital adequacy ratio based on domestic standards was 10.69 percent, and the Tier I ratio was 8.41 percent.

	Millions of yen
	Consolidated		Non-Consolidated
March 31	2007	2006	2007	2006
Tier I:
Common stockholders’ equity	¥ 175,681	¥ 167,290	¥ 168,644	¥ 161,060
Total Tier I capital	175,681	167,290	168,644	161,060
Tier II:
Premises revaluation account, after 55% discount	3,688	3,685	3,688	3,685
Reserve for possible loan losses	10,940	12,475	10,834	12,320
Total Tier II capital	46,629	33,160	46,522	33,006
Deduction from capital	765	101	765	101
Total capital	221,546	200,350	214,401	193,966
Total risk-adjusted assets	2,034,312	1,996,000	2,005,232	1,971,348
Capital adequacy ratio (%)	10.89	10.03	10.69	9.83

Total Equity
Net assets as of March 31, 2007 totaled ¥265,343 million.

Cash Flows
Net cash used in by operating activities totaled ¥80,623 million, reflecting an increase in loans and other factors. Net cash provided by investing activities totaled ¥44,104 million, reflecting factors such as redemption of securities. Net cash provided by financing activities totaled ¥13,186 million due factors including the issue of subordinated bonds. As a result, cash and cash equivalents at the end of the year decreased ¥23,328 million from a year earlier to ¥102,419 million.

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