Message from the President

I would like to thank all our shareholders and other stakeholders for their support and encouragement. The following is a report on the Bank’s business and earnings performance for the six-month first-half period (April 1 to September 30, 2010) of the fiscal 2010 business term.

　Isao Oshiro

　President

Financial & Economic Environment

Although consumer spending was tentatively higher than expected thanks to surging demand prior to the end of eco-car subsidies and the effects of the summer heat wave, the Japanese economy was stagnant in the first half of fiscal 2010 due to flagging exports to Asia.

　While construction continued to weaken due to the diminishing effects of government policies including a supplementary budget, consumption recovered partially thanks to tax breaks and subsidies for eco-cars and an eco-point program to encourage environment-friendly purchasing of home appliances. In addition, tourism rebounded due to high school athletic events held in Okinawa, and other factors. As a result of the foregoing, the economy of Okinawa Prefecture showed signs of bottoming out.

Business Activities & Performance Results

Against this backdrop, in April 2010, the Bank embarked on its RISING PLAN 2010 medium-term management plan that targets the improvement and expansion of its business foundation for the next leap forward. Under its target of rapidly implementing business, human resource and functional innovation reform, in fiscal 2010, the first year of the medium-term management plan, the Bank upgraded and expanded channel infrastructure, developed Life Plan marketing for individual transactions and strengthened its marketing capabilities for corporate transactions. Moreover, in July 2010, the Bank acquired and retired Type 1 preferred stock (public preferred stock) and completed the repayment of public funds.

　With respect to the improvement of channel infrastructure, in July 2010, we dramatically increased customer convenience and expanded our business foundation in individual transactions by installing ATMs in nearly every Family Mart and Lawson convenience store in Okinawa Prefecture, thereby creating an unparalleled ATM network within the prefecture. As for the development of Life Plan marketing for individual transactions, in July 2010, we initiated the Life Plan Simulation, thereby creating a system for the development of solution-based marketing to provide financial products and services that are suited to the life stages of individual customers.

　To strengthen our marketing capabilities for corporate transactions, we launched new products including TKC monthly closing support loans and also supported the financing of small and medium sized enterprises that do not have sufficient real estate collateral by allowing precious metals and luxury goods to be used as non-real estate collateral. To strengthen our capabilities for solving our customer’s business problems, we improved our problem-solving oriented financing capabilities by spinning off our Financial Service Office that had been set up in the Business Administration Department and turning it an independent Consulting Business Department.

Issues Facing the Bank

Amid concerns over a possible downside from the effects of an economic slowdown overseas, a sudden appreciation of the yen, and other factors, the future state of Japan’s economy appears uncertain, as does the future number of tourists expected to visit Okinawa Prefecture.

　Under these conditions, the Bank, while rigorously enforcing legal compliance, will make every effort to win the trust and support of customers by fulfilling its responsibilities as a leading financial institution in the prefecture through business, human resource, and functional innovation reform as set out in the RISING PLAN 2010 medium-term management plan, and by demonstrating its substantial consulting capabilities.

November 2010