Final Agreement on Business Integration through Share Exchange between The Gunma Bank, Ltd. and Daishi Hokuetsu Financial Group, Inc.

Overview of Business Integration

The Gunma Bank, Ltd. and Daishi Hokuetsu Financial Group, Inc. have reached a final agreement to carry out business integration through a share exchange effective April 1, 2027. The integration will adopt a holding company structure, utilizing Daishi Hokuetsu Financial Group as the holding company of the new financial group. This approach aims to leverage the strengths of both companies in building a new financial group rooted in the local community.

Details and Schedule of Share Exchange

The share exchange ratio is set at 1 share of The Gunma Bank for 1.125 shares of Daishi Hokuetsu Financial Group, with approximately 425.8 million common shares of Daishi Hokuetsu Financial Group to be issued. After obtaining approval at extraordinary shareholders’ meetings of both companies on December 23, 2026, The Gunma Bank will be delisted on March 30, 2027, and the share exchange will become effective on April 1, 2027.

Purpose and Synergies of Business Integration

Both companies aim to strengthen their regional customer bases, enhance profitability, and efficiently utilize management resources by expanding and advancing their consulting functions. Through system integration and operational streamlining, they will pursue economies of scale, while promoting diverse talent development and effective utilization of human capital. This will drive the creation of a sustainable business model.

Future Outlook and Governance

Representatives from both companies are scheduled to serve as co-CEOs of the integrated holding company, with outside directors and auditors appointed from both sides. The governance structure will be strengthened to ensure proper decision-making at shareholders’ meetings and board of directors meetings. The financial impact of the business integration is expected to be minimal.