For the year ended March 31, 2007, lower returns on securities resulted in reduced interest income. As a result, ordinary income decreased ¥2,670 million compared with the previous fiscal year to ¥89,004 million.

On the other hand, ordinary expenses increased ¥623 million compared with the previous fiscal year to ¥71,650 million. Despite a reduction in other operating expenses due to lower losses on sales of bonds, interest expenses increased centered on interest on deposits.

Consequently, ordinary profits decreased ¥3,294 million compared with the previous fiscal year to ¥17,354 million. Moreover, net income decreased ¥1,846 million compared with the previous fiscal year to ¥9,680 million.

Hyakugo Bank aims to be a bank that customers can truly rely on and to develop along with customers in the region we serve. In April 2007, we launched a new medium-term management plan, Wisdom-Based Innovation 2009. Attack and Speed are the key words of this plan. Our basic strategies include enhancing sales capabilities, strengthening our strategies for Aichi Prefecture, increasing channel convenience and strengthening products. We intend to emphasize our traditional advantages and strengths while also enhancing earnings capabilities and management efficiency through aggressive initiatives in new areas and new businesses.

Fiscal 2006 was the final year of the Second Management Plan of the New Century that Hyakugo Bank initiated in April 2004. One of our goals under this plan was to provide flexible financing for small and medium-size business customers. We therefore restructured our Hyakugo Business Loan Manekineko product. Moreover, we also focused on the baby boomer generation in aggressively responding to retirement benefit management needs by launching Atsui Uta, a time deposit for managing retirement benefits.

Hyakugo Bank has also responded energetically to a diverse array of needs. We offer services such as loan consultation and asset management seminars on weekends to meet the needs of customers who may not be able to get to the bank on weekdays. We also began providing business and commerce consulting in Shanghai and concluded a memorandum of understanding with the government of Vietnam as part of our efforts to support investment by Japanese-affiliated companies. Other programs included assistance for customers developing business in Asia.

Corporate social responsibility has become a focus of attention in recent years. In October 2006, Hyakugo Bank employees and their families participated in planting trees as part of a forestation project conducted by Mie Prefecture.

Moreover, in May 2007 Hyakugo Bank began operating Bank Vision, a new backbone system. We will use this system’s open features in working to quickly provide products and services that offer even more customer satisfaction.

We intend to earn the trust of customers by working to achieve the objectives of Wisdom-Based Innovation 2009. All Hyakugo Bank employees will work in concert for the development of the bank and the region we serve.