1. Tohoku Area Banking Industry Report

2. Tohoku Area at grace Tohoku represents 8.2% of Japan GDP. Population has been declining since 1980’s and per capita GDP ranks lower 25% tile except for Miyagi and Fukushima Center of Economy is Sendai. Many banks are opening their branch in Sendai. Compared to other area, drop of DI was relatively moderate. There is 15 banks in Tohoku area. Except for 77 bank, their size are small and OHR are high. 7 out of 15 banks have 70+ OHR and 5 (Michinoku, Iwate, Tohoku, Shonai, Toho) of which are highest 20% among Japanese banks. Shonai, Hokuto, Tohoku, and Michinoku aligns together in several business areas. Though Shonai had high MOF capital ratio of 11% in 03/08, it has dropped to 8.7% in 9/08 because Shonai injected capital to Hokuto. Hokuto’s MOF capital raito became 8.0% in 9/08 because of this injection. Aomori Iwate Hokuto 77 Sendai Shonai Kirayaka Toho Fukushima Daito 1.5 tn+ deposit 4 tn+ deposit <1.5tn deposit Yamagata Akita Kita-Nippon Tohoku Michinoku : AAI NET (ATM Alliance) : Alliance (Study group, Syndicate loan, Securitization product) : Mizuho is one of the major shareholders : Tokyo Mitsubishi UFJ is one of the major shareholder

3. Tohoku Economy – as bad as Kanto and Chubu DI of small/mid manufacturing companies in Tohoku area has dropped by 12.7 point from (-38) 1H 2008 to (-50.7) 2H 2008. The drop is almost as high as Kanto and Chubu where many manufacturing companies for export exist. Manufacturing Companies Non-manufacturing Companies DI of small/mid companies by region

4. Tohoku Area Average population per regional bank mn Hokkaido Tohoku Kanto Hokuriku ChubuKinki Chugoku/ Shikoku Kyusyu Source: Compiled using “Statistics of Prefecture 2008” Tohoku ranks second lowest nationwide among peers when measured by average population per regional bank. 15 regional banks among population of only 9.5 million people.

5. Shonai Bank: 11 th largest out of 15 banks in Tohoku Deposits of all regional banks in Tohoku (as of FY03/08) Source: Compiled from company annual reports * Kirayaka HD is aggregation of Shokusan Bank and Shiawase Bank JPY bn

6. Size Matters Source: Company Annual Report (as of 3/2008) Tohoku ranks second lowest nationwide among peers when measured by average population per regional bank. OHR, thus profitability of the bank, is correlated to the size of bank. Because of its size, “Jinano” banks have disadvantage to their competitors.

7. Holding-co w/ Hokuto Bank Post-merger: Shonai & Hokuto become 4th largest Tohoku bank Deposits as of FY03/08 JPY bn However, MOF Cap ratio of Shonai Bank has dropped from 11% (03/08) toto 8.7% (9/08) because of the capital injection to Hokuto Bank Ak ita ● ● Yamagata ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Akita City Tsuruoka City Sakata City Yamagata City ● ● ● ● ● ● ● ● ● ● ● ● ● Sendai City Iwate Miyagi

8. Appendix 1: Shonai Bank

9. Fastest Growing Bank In Tohoku Source: Compiled from company annual reports * Kirayaka HD is aggregation of Shokusan Bank and Shiawase Bank Growth in deposits of all regional banks in Tohoku (3yr CAGR; as of FY03/08)

10. ISB and Branch Strategy Sendai City Yamagata City In-store branch map (6 in Yamagata; 8 in Miyagi, 1 in Fukushima) While most other banks are prioritizing impersonal channels like net banking, Shonai is expanding efforts into face-to-face banking. Two key distribution channels: Branches: Elegant interior design; focus on “life-consulting” ISBs: Shopping mall based; Low up-front investment burden Concentrating on investment trust and insurance products, Shonai has been successful in acquiring affluent customers. Using the innovative In-Store Branch (ISB) format, Shonai has also achieved high new customer acquisition at low cost. While most other banks are prioritizing impersonal channels like net banking, Shonai is expanding efforts into face-to-face banking. Two key distribution channels: Branches: Elegant interior design; focus on “life-consulting” ISBs: Shopping mall based; Low up-front investment burden Concentrating on investment trust and insurance products, Shonai has been successful in acquiring affluent customers. Using the innovative In-Store Branch (ISB) format, Shonai has also achieved high new customer acquisition at low cost. 【 ISB （ in-store branches ）】 【 Branches with elegant interior design offer individual consulting areas 】

11. Leverage ISB expertise 3 0 30 1211 3 Shonai will become an agency in Tohoku area and also provide Aeonbankconsulting service of In Store Bank management for other Aeon ISBs. Aeonbank has found in 2007 backed by one of the top GMS in Japan, Aeon. Shonai made an alliance with Aeonbank in Nov 2008. # of ISBs of Aeonbank by Area Countrywide network of GMSs Successful pioneer of SBI in Tohoku Area Source: Company Semi Annual Report Branch Mgt Consulting ISBs # of ISBs of Regional Banks in Tohoku

12. Focus on Fee Business Source: Compilied from company annuar reports Fee Income Ratio （ Fee Income / Gross Profit ） Ratio of mutual fund AUM to total AUM and ratio of fee income to gross profit

13. Top Saler of MF/Insurance in Tohoku Area (bn) Mutual Fund sales since Dec 1998 7 year CAGR 25.2%