Policy for Disposal of Nonperforming Loans and Balance of Nonperforming Loans as of March 31, 2007
Hyakugo Bank makes appropriate write-offs and provisions to reserves according to the possibility of recovery or the risk of impairment of loan assets, as determined by the Bank’s self-assessment of credits. In addition, the Bank aggressively works to recover nonperforming loans, and is carrying out the final disposal of nonperforming loans through sales and other means. As a result, the amount of disposal of nonperforming loans on a consolidated basis in the year ended March 31, 2007 totaled ¥4,641 million.

Risk-Monitored Loans and Balance, Prior-Year Comparison and Loans Disclosed under the Financial Reconstruction Law
Risk-monitored loans on a consolidated basis totaled ¥77,539 million as of March 31, 2007, a decrease of ¥6,050 million from a year earlier, and represented 3.60 percent of total loans outstanding, a decrease of 44 basis points from a year earlier.
 
Loans disclosed under the Financial Reconstruction Law on a non-consolidated basis totaled ¥78,327 million as of March 31, 2007, a decrease of ¥4,983 million compared to a year earlier. Nonperforming loans as a percentage of total credit outstanding remained at a low level, decreasing 42 basis points from a year earlier to 3.53 percent. The coverage for nonperforming loans was 79.55 percent, and the Bank maintains appropriate reserves to cover future risks and improve asset quality.