Since our founding as Japan’s 18th national bank in 1877, we have grown in tandem with regional society, driven by a commitment to maintaining sound business operations. Throughout our history, we have overcome numerous challenges to establish a firm foundation as the core bank in our region, and we extend our thanks to everyone for their warm and long-lasting support.
    The environment facing financial institutions has undergone dramatic changes in recent years. For example, in April 2005, the government discontinued its guarantee on deposits exceeding ¥10 million. This is prompting customers to be more selective about the institutions they choose.
    In order to revitalize the economies of the regions in which they operate, regional financial institutions are being required to strengthen their management capabilities, support corporate revitalization and facilitate financing for small and medium-sized companies, as well as enhance convenience for local customers and ensure sound operations.
    In this challenging business environment, we are steadily implementing our medium-term management plan "21st Century Marketing Strategy — Stage 2." In fiscal 2005, we are working to realize a recovery in earnings, and become the leading bank in Nagasaki Prefecture in terms of both financial soundness and profitability. Our aim is to create a solid financial base that will make us impervious to changes in our operating environment.

Progress Report on Medium-Term Management Plan
In April 2004, we entered Stage 2 of our medium-term management plan "21st Century Marketing Strategy — Stage 2," which covers the two-year period ending in March 2006. In October 2004, however, we substantially revised the plan with the aim of gaining greater trust from the public and the stock market by implementing all possible measures to create a business structure resilient to market fluctuations by the end of fiscal 2004.
    We made revisions taking into consideration the higher profitability and sounder financial position required for banks ahead of the enforcement of the ¥10 million cap on government guarantees for deposits.