Daishi Hokuetsu Financial : INTEGRATED REPORT 2022

Corporate Logo and Corporate Color

of the Daishi Hokuetsu FG

Corporate Logo

Based on the motif of geography in Niigata Prefecture, the corporate logo uses a golden color representing bountiful harvests of rice to express the expansive land, and uses the corporate color azure to express the rivers which moisten that land and the vast Sea of Japan connecting with the rest of the world.

The elliptical shape in the center of the logo was designed in the image of islands and rice in Niigata Prefecture.

The two lines rising upwards depict how Daishi Bank and Hokuetsu Bank form a single massive surge, boldly challenging changes for the future and continuing to contribute to regional society.

Corporate Color

Azure

Blue colors create positive images such as trust, sincerity, and future orientation. Among blue colors, azure is a particularly rich and beautiful shade.

In our logo, the color azure represents the vast Sea of Japan which borders Niigata Prefecture; the Shinano River, Agano River, and other rivers which flow into the Sea of Japan after moistening the fertile land; and the clear expanse of blue skies. This color represents how our new financial group will continuously grow in the future while earning the trust of regional society.

DAISHI HOKUETSU Financial Group, Inc.

Location of principal head office functions: 1071-1Higashiborimae-dori7-bancho,Chuo-ku,

	Niigata-shi, Niigata Prefecture
TEL	025-224-7111 (representative)
URL	https://www.dhfg.co.jp/

Edited and issued by the Business Planning Division of Daishi Hokuetsu Financial Group Issued in July 2022

2022 REPORT INTEGRATED HOKUETSU DAISHI

Integrated Report2022

DAISHI HOKUETSU INTEGRATED REPORT

This Disclosure Magazine is	The disclosure uses easy-to-read	Daishi Hokuetsu FG and the	Daishi Hokuetsu Bank is
printed with	universal design font.	TSUBASA Alliance have set	has signed the Principles for
vegetable oil ink.		SDGs Declarations.	Financial Action for the 21st Century.

Contents

Message from Management	03	Communication with Stakeholders	58
Message from Management‥ ‥‥‥‥‥‥ P.03	Communication with Stakeholders‥ ‥‥‥ P.58
Overview of the Daishi Hokuetsu FG	09	Corporate Data	60
Business Area‥ ‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥ P.09	List of Executives‥ ‥‥‥‥‥‥‥‥‥‥‥‥‥ P.60
Financial / Non-Financial Highlights‥‥ P.11	List of Group Companies‥ ‥‥‥‥‥‥‥‥ P.62

History of the Daishi Hokuetsu Bank‥ ‥ P.13

Value Creation Story

15

Overview of Value Creation Story‥‥‥‥ P.15

Increasing Diversification and Complexity of the Needs of Regional Society and Changes in the Business Environment Surrounding the FG‥‥‥‥‥‥‥‥‥‥‥‥‥ P.17

The 2nd Medium-Term Management Plan‥‥‥ P.18 Sustainability Initiatives‥ ‥‥‥‥‥‥‥‥‥ P.19

New Value Creation‥ ‥‥‥‥‥‥‥‥‥‥‥ P.28

Business Base to Support New Value

Creation‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥ P.38

[Editorial Policy]

Daishi Hokuetsu Financial Group has prepared this"DAISHI HOKUETSU INTEGRATED REPORT 2022"in order to help readers gain a better understanding of the company's initiatives aimed at sustainable value creation. When compiling this report, we have referred to the "International Framework," the Ministry of Economy, Trade and Industry's "Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation (Guidance for Collaborative Value Creation)," and other resources.

Regarding our Disclosure Magazine prepared in accordance with

Articles 21 and 52-29 of the Banking Act and Article 7 of the Act on Emergency Measures for the Revitalization of the Financial Functions, please refer to "Disclosure Magazine 2022 (https://www. dhfg.co.jp/financial/ir/disclo/)"on the website of the company.

This report contains forward-looking statements, but these are not guarantees of future performance and may differ materially from actual results owing to changes in the business environment and other factors.

This section introduces the Daishi Hokuetsu FG's system for creating new value through our business activities.

This section introduces the new value being created by the Daishi Hokuetsu FG.

This section introduces our five strengths and business base for supporting new value creation, including governance and risk management systems.

[Presentation of figures]

On January 1, 2021, the company's wholly owned subsidiaries, Daishi Bank and Hokuetsu Bank, merged, with Daishi Bank as the surviving company and Hokuetsu Bank as the dissolving company, with the company name changing to Daishi Hokuetsu Bank.

The figures for Daishi Hokuetsu Bank in this document are calculated in accordance with the following rules from the perspective of making appropriate period comparisons for each item.

• March 31, 2021, the fiscal year ended March 31, 2022, and March 31, 2022
  Figures for Daishi Hokuetsu Bank
• The fiscal year ended March 31, 2021
  Simple sum of the figures for Daishi Bank and Hokuetsu Bank for April - December 2020 and the figures for Daishi Hokuetsu Bank from January 2021 onwards
• Figures for the fiscal year ended March 31, 2020 and for March 31, 2020
  Simple sum of the figures for Daishi Bank and Hokuetsu Bank

*As a general rule, the figures in this document have been rounded down to the nearest unit.

*The"Daishi Hokuetsu Financial Group"may be referred to below as"Daishi Hokuetsu FG,""FG"or"the company"in this document. "QR* Code,"which is referenced in this document, is a registered trademark of DENSO WAVE INCORPORATED.

Inquiries Business Planning Division, Daishi Hokuetsu Financial Group TEL: [phone] (representative)

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Thank you very much for your continued support.

The Daishi Hokuetsu Financial Group (the"Group") focuses on constructive dialogue (engagement) with all stakeholders, with a view to achieving the sustainable growth and medium- to long-term enhancement of corporate value expected under the Corporate Governance Code, as a company on the Prime Market, where have a higher level of governance is required.

As part of these efforts, we have decided to overhaul our existing"Integrated Report and Disclosure Magazine"and publish it as our"Integrated Report."

In the"Integrated Report,"in addition to the existing disclosure of financial information, we will also take steps to enhance the disclosure of non-financial information and sustainability initiatives in line with the Group's medium- to long-term value creation story. Accordingly, we intend to use the"Integrated Report"as an engagement tool to promote constructive dialogue with stakeholders, and we hope you will enjoy reading it.

Going forward, we will continue to contribute to the development of regional society by providing new value based on our Management Philosophy, while placing importance on the"trust"of our stakeholders.

We look forward to your continued support and favor.

Philosophy

Management

Philosophy

As a trusted financial group,

we will continue to provide services that live up to the expectations of customers and contribute to the development of regional society.

We will boldly take on challenge to create new value.

Action Principles

Mission

Vision and Approach

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Message from Management

Message from Management

Building on the trust from the local community that we have built up over the past 140 years, we will achieve sustainable growth in the region.

Arrival of an Era of Great Change

The business environment surrounding the Group is becoming increasingly uncertain and changing from multiple perspectives, including the declining and aging population with a decreasing number of children, the normalization of ultra-low interest rates, and intensifying competition from other industries, as well as new risk factors such as the prolonged impact of COVID-19 in recent times and the emergence of geopolitical risks, which have caused spikes in the prices of energy

and materials, and rapid fluctuations in foreign exchange markets and interest rates. At the same time, the importance of sustainability, including digital transformation (DX) and climate change, is growing at an accelerating pace as digital technology advances.

As these changes overlap, we are currently in an era of great change, in which social and industrial structures, as well as the lifestyles of individ- uals, are undergoing significant change.

President and Representative Director

Michiro Ueguri

Our Management Philosophy is Our Story of Sustainable Value Creation

Eiichi Shibusawa, who established Japan's first bank (The First National Bank) in 1873, stated, "In all things, I think that those who use trust as the basis of things and do things in accordance with what is right will surely prosper, and those who take actions that violate what is right will surely

perish." This concept forms the basis of"sustain- ability management,"which has recently been attracting attention around the world.

Daishi Hokuetsu Bank, the core company in the Group, has built a deep relationship of trust with the local community by continuing to contribute

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Message from Management Overview of the Daishi Hokuetsu FG Value Creation Story Communication with Stakeholders Corporate Data

to regional society for more than 140 years since its establishment in 1873. Today, we position "trust"as a core competence of the Group, and earning"trust"is part of the "Action Principles"in our Management Philosophy.

The"Mission"of the Group, which expresses

・ ・ ・

our raison d'être, is also to"continue to contribute to the development of regional society."In other words, building on the foundation of trust, we will repeatedly enter into deep dialogue (engagement) with our customers, and adopt a stance of boldly taking on challenge in this"era of

great change"and engaging in related study. In this way, we will develop an understanding of the increasingly diverse and complex issues and needs of our customers, and create and provide new value that exceeds expectations. As a result, the Group pursues cyclical and sustainable growth through the development of our customers and regional society, as well as the enhancement of our corporate value and the trust of stakeholders.

In this way, the Group's Management Philosophy clearly expresses our story of sustainable value creation.

Unity of Purpose: Our Slogan for Achieving our Management Philosophy

In April 2021, when I assumed the position of President, I adopted the phrase "unity of purpose" "isshi(-danketsu"in Japanese) as a slogan to enable all officers and employees to work together to achieve our Management Philosophy.

"Shi," the Japanese for"purpose"in this slogan, refers to our Management Philosophy. "Shi"is a strong feeling that one "wants to achieve something or become something," and I think that organizations in which each and every officer and employee has diverse values and mutually accepts one another tend to be resistant to environmental change and are likely to produce unexpected results, in a positive sense. Accordingly, I believe that we should all have our own individual "shi (purpose)." As we work in the Group, however, I hope that all officers and employees have the "Management Philosophy" as a set of shared values.

The Group was established in October 2018 through the management integration of Daishi Bank and Hokuetsu Bank, which were both based in Niigata Prefecture. The two banks subsequently merged in January 2021. Based on the long history of the two banks sharpening their skills through healthy rivalry since the late nineteenth century, "ichi" in our slogan (meaning"one"in Japanese) also refers to a group

of people with the same purpose "shi")( belonging to a single organization. In addition, the meaning of "danketsu"("unity" in Japanese) is that all of us are keenly aware of our"shi,"i.e., our common purpose, and by working as one to achieve this purpose, we will enhance our collective strength as an organization and make significant use of the synergies generated

by our integration and merger. We have expressed these ideas as the slogan, "unity of purpose."

In June of this year, approximately 90% of respondents to an employee survey answered that "harmony is progressing." Based on the results of this survey, I believe that this slogan has now moved from "unity of purpose" in related to harmony between the employees of the two merged banks, to the next stage, namely "unity of purpose" in relation to employees with diverse attributes, such as officers and employees, different genders, branch managers and new employees, and new graduates and mid-career employees.

In addition, in order to further solidify our "unity of purpose," I have taken the initiative in directly contacting employees to communicate my thoughts and ideas in my own words. In addition, I am creating opportunities to listen to the opinions of employees on an ongoing basis, and officers other than myself are also actively visiting sales offices, etc., and creating opportunities for direct dialogue with employees. In such ways, senior management and employees engage in regular and repeated dialogue.

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