2020 Annual Report

PARTNER RURAL BANK (COTABATO), INC.

As of Dec. 31, 2020.

I. Compliance with Subsec. 4190 Q.5 – Disclosure Requirements in Annual Report.

       1.       Corporate Policy.

a. Brief discussion of the bank’s Vision and Mission statements.

The latest formulated Vision of Partner Rural Bank, Inc. developed by 2018 to cover its Strategic goals and objectives covering 2018 until 2023, is described as follows: To be a premier bank and dominant market leader that provides competitive, innovative and diversified banking products and services for countryside progress. The corresponding Mission on the other hand is to achieve the status of Partner Rural Bank, a preferred financial provider, is committed to deliver convenient, creative and advance technologies to all its customers, clients and stakeholders branch – wide.

First, the Partner Rural Bank, Inc. would like the public, and by itself, to view the bank as a “premier” firm, and in the process become a “leader of the rural banking and financing market” until 2023.  By that time, the Partner Rural Bank, Inc. should be providing highly competitive, highly innovative and definitely diversified bank products and services for the benefit and progress of the countryside to which it has been serving for the more than 40 years.  Simultaneously, it also has to keep itself also aware of the on – going changes and developments in the surrounding, the environment, the socio – political phenomena, and the community and sectors that it has been serving for the mentioned past years.  

Of recent development this year was the global rise and spread of the corona – virus that has cropped up in Hunan, China, on Dec. 2019. By the first months of 2020, it has already spread out in Manila, Cebu, and other nearby areas, and where the responses such as the lock - downs, quarantines, avoiding crowding and social activities were being implemented. The social responses to control the spread of Covid – 19, as it turned to be referred to, has gravely affected business operations especially in the urban and industrialized sectors, the marketing and distributions of goods and services, and, most specially the banking operations and banking customer relations even within the provinces in Cotabato and Region 12. 

Secondly, in connection with the stated vision, how will the bank do the above?  What then would be the strategy or the strategies to achieve the goal? What then could be done to become “premier”? How is it to be a “preferred” financial provider by the customer?  By its stated mission, the bank will have to do things that will make the public look at it as their “preferred provider of financial services” that will make the bank and its staff and employees, its shareholders and officers committed in delivering the most convenient, creative, and technologically advanced products to their customers, clients and stakeholders.  A major part of the Mission, that is, in undertaking a strategic plan that will make it a premier and preferred banking and financial provider. 

• Introduction of the bank’s brand.

Partner Rural Bank, Inc. has for more than 40 years been branded as basically an agriculture – oriented and focused rural bank. It all started as a Masagana – 99 Program participant in its early stages of development until the collapse of the program during the dying years of the Marcos regime in 1985. The years thereafter, the bank has carried its concentration on farmer subsistence – rice production, on agricultural improvements and development, and rural integration. In early 1980, at the time the bank has participated in the government’s Masagana – 99 and other agricultural credit projects, the bank has also invested in rice – milling and hog – raising firms in Pigcawayan Agro – Industrial Development Corporation (Paidcor) until 1992.  It was only lately that the bank, has shifted since around 2010 – 2012 to introducing electronic banking technologies with the introduction of ATM units and its membership with the BancNet network of commercial, thrift, and a few rural banks during the period. The bank was also an original incorporator and member of the Phil. Payment Management, Inc. (PPMI).  At its first phase of development therefore, the bank was branded as a serious agriculture – focused rural bank proven by the fact that its loans a mainly agricultural of up to 75% of its portfolio.  At the second stage of its upgrading, the bank was branded and identified as an on – going electronic and digitalized rural bank but still with food sufficiency and agricultural development focus.

• Business model of the bank.

The bank’s current Business model is to be consistent in the descriptions provided in its Vision, that is to be a highly competitive, innovative and diversified bank with banking and financial products and services that are suitable to its surrounding countryside regions. Likewise, its business model, also consistent with its mission describes itself as a preferred financial provider which is committed to deliver convenient, creative and advanced banking – related technologies to the customers, clients and stakeholders all over. The branches and branch – lites of the bank are considered its “business centers” which are all focused on generating credit and loan transactions, mobilizing savings and promoting deposit generation, and building revenues and resources. 

• Financial Summary/ Financial Highlights.

	Consolidated
Minimum Required Data:	As of Dec. 31, 2020	As of Dec. 31, 2019
Profitability:
Total Net interest income -	₱ 23,088,294.66	₱ 22,957,029.50
Total Non – interest income  -	13,550,228.55	15,373,935.60
Total Non – interest expenses -	31,917,260.35	31,245,378.06
Pre – provision profit  -	4,721,262.86	7,085,587.04
Allowance for Credit losses -	1,065,122.99	2,370,049.76
Net Income -	P2,826,345.09	P3,551,174.19
Selected Balance Sheet data:
Liquid Assets -	₱ 142,41,606.51	₱ 77,613,804.37
Gross Loans -	139,747,754.36	162,158,796.03
Total Assets -	301,330,403.62	262,306,432.57
Deposits -	225,438,548.75	185,738,646.21
Total Equity -	65,977,568.03	64,532,072.58
Selected Ratios:
Return on Equity (ROE) -	4.33	5.59
Return on Assets -	1.00	1.35
Capital Adequacy Ratio -	23.52	23.73

The bank’s asset in 2020 increased by around P40.0 m. compared to figures in 2019. The same holds true for the deposit liabilities. Net income however decreased by around P200.0 th. by 2020 due to the decline in Loans and collection items. 

• Financial Conditions and Results of Operations.
  • Review of the bank’s operations and the results of operations for the financial year including details and explanations for any significant change during the year.

By Mar. 10, 2020, the restricted movement of people, including working and employee sectors, has been introduced without much explanations on why, how, and the conditions for the adoption of the lockdowns or the General control and reduction of mass movements in practically all the provinces and cities. A lot of explanation and clarifications were still being formulated for clearer understanding of what has been happening. Lot of things have been done to minimize the movements and the unnecessary gatherings of the people.  Coupled with this limitation in transacting and dealing with the bank officers and managers directly, contributed to the limits of applications and inquiries about the loans and lending procedures, and which definitelycontributed to the reduction of loan portfolio.  Compared to active loan level last 2019, loans by the end of 2020 were reduced to as much as ₱15.0 million worth of loans. Furthermore, self – induced delays in payment schedules, dumping the payment schemes for loans particularly the daily collection loans for market – vendors, stall holders, store – keepers, allowing postponements of schedules of payments, and providing grace – periods, have been practiced by the bank, much earlier that the issues of rules and regulations regarding the effect upon the loans by the pandemic.

• Highlights of the major activities during the year that impact operations.

Introduction of lock – downs, social distancing, reduced direct and personal transactions inside the bank’s offices and tellers, quarantine for suspected carriers of viruses, adopting reduction of bank staff into skeletal teams, and reducing working days to only three days per banking weeks – all these activities in response to Covid – 19 has created reduced customer direct – transactions. Customers are too involved and familiar with the Pre – Covid – 19 approaches such that a relative number of accounts were simply paid – off and the collaterals were reclaimed.

However, despite the Covid – 19 related activities, or reduced activities, so – to – speak, Partner

Rural bank however was able to launch and implement its Mobile Banking Services which is part of

its digitalization and the option of raising a more non – interest bearing product and services, despite the difficult operating situations.  It was launched on 20 October, 2020.

• Major strategic initiatives during the year that impact operations.

A major strategic move done by the bank by 2020 was its digitalization.  Digitalization was pursued by the bank even during the difficult period of Covid – 19 for the following considerations: 

• improved operational efficiency,
• allows the bank to offer services to customers even physically outside the bank,
• reduce the need of customers and clients to physically go to the bank,
• and, therefore even widen the banks geographical reach,
• reduce operational costs also through reduced manual paper works and paper docus, - and, then lesser need to have more “brick and mortar” branches.

It was projected that many transactions such as deposits/ withdrawals, Loan disbursements/ repayments, fund transfers, bill payments, government transactions, SSS, etc. and payments to private transactions could be done more conveniently. Given the current financial culture of the masses in the countryside, the bank’s entry to digitalized/ electronic banking, will pave the broader financial integration in Cotabato.

• Challenges, opportunities, and responses during the year.

Given the statements in the National Strategy for Financial Inclusion, “financial inclusion is defined as a state wherein there is effective access to a wide range of financial products and services by all”.  Partner Rural Bank, Inc. has taken this statement as a challenge, and likewise an opportunity to itself to be able to provide access to a wide range of financial products and services to majority of our population who could be reached by the bank. These challenge and opportunity is also imbedded in the banks vision and mission statement.  In response to these, the bank further pursued its installation of the Mobile Banking Service, its willingness to implements the fund transfer and bill payment systems through partnerships with BancNet networks, and other outsourced providers and partners. Although it can be stated that the digitalization process of the bank  has started with its membership to PhilPass way back 2012, membership to BancNet in 2014, membership to Phil. Payment Management Inc. (PMMI) in 2018, the bank is still pushing through with the digitalization effort by launching its MBS on Oct. 2020.

• Financial Results of Business Segments. (For Complex Banks)
  • Summary of the Financial Performance of the business segment.
  • Contribution of each Major business segment to the total revenue of the bank.
  • Significant developments during the year including major activities.
  • Future Plans/ Targets/ objective.

• Risk Management Framework adopted.
  • Over- all Risk management culture and philosophy.

The Risk Management Framework of Partner Rural Bank (Cotabato), Inc. has been upgraded as the  new and additional word “framework” as introduced could mean an outline, a context, or a summary, that seeks to point within such framework the risks currently confronted by the bank while evolving into its current state and conditions affecting its operation, goals and objectives.

On the other hand, Risk Management is the set of activities or actions that leads to the identification, assessment, and prioritization of Risks defined in ISO 31000 as the “effect of uncertainty on objectives, whether positive or negative followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities”.  As Partner Rural Bank adopts the definition, risks to the bank can come from uncertainty in financial markets, business and project failures, legal liabilities, credit risk, accidents, even natural causes and disasters, as well as deliberate attacks from an adversary.  Philosophically, the bank has realized that banking is the love of taking on risks, and culturally, the bank is enjoying taking and gambling with risks.  Given the above descriptions and definitions, Partner Rural Bank, attends to the need to come up with its Risk Management Framework (RMF) at this 2020 stage of its development.

Managing the risks confronted by the bank is handled by the risk – lovers, the members of the board itself, and are the key officers of the bank guided by this framework. The risk management function of the board of directors shall be responsible in identifying, measuring, monitoring and reporting risks. 

The risk management however is directly rendered as one of the responsibilities of the Chief Operating Officer (COO) who shall directly decide and submit reports to the Board of Directors.  Furthermore, personnel and staff designated by the COO as part of the risk management team have critical knowledge and technical skills commensurate with the current business activities and exposures of the Partner Rural Bank.  Eventually, with the assumption that the operations of the bank will grow with the digitalization, and with the introduction of electronic, mobile banking, and on – line banking products, the bank expects the need to designate a Chief Risk Officer or Risk Management Officer under the Chief Operating Officer in the near future.

b. Risk appetite and strategy.

Per BSP statements in MORB, the bank’s Risk Appetite, on the other hand, should be clearly understood by the members of the Board of Directors, senior management, employees, shareholders and stakeholders, the public and the BSP itself, as the regulator.  As defined, the risk appetite has to be contained in a statement made to present “the individual and aggregate level and types of risks” that the Partner Rural Bank is willing to assume, as the risk – lovers, in order to achieve its business objectives and considering its current capacities in managing those risks.

As Risk management is simply a practice of systematically selecting cost - effective approaches for minimizing the effect of actual threats realized by the bank. All risks can never be fully avoided or mitigated simply because of financial and practical limitations. Therefore, all organizations, including Partner Rural Bank, have to accept some level of residual risks. Somehow, the bank has to have some appetites also for the risks, otherwise the bank just might have to have 100% aversion and hatred for risks.

The bank recognizes the following risks in terms of criticalness or importance, or lined – up in terms of vital importance or dangers to the bank’s operations: 

Degree of importance		Incidences/ instances of bases of risks.	Appetite/s
1st	Credit risks	Changes in the perceived abilities of borrowers to re-pay their borrowings and loan obligations.	Could take risks up to 15% past due ratio.
2nd	Financial risks	Poor quality of information on finance policies, lending types and portfolio, liquidity, Asset/Liability management, Capital adequacy, Investment decisions, External fund sources.	Current asset up to 20% of total Deposit accts. Capital adequacy up to 12%. Loan Loss provision <  10% of total loans, etc.
3rd	Operational risks	High costs due to mistakes/ errors in transactions, failures to meet regulatory requirements leading to penalties, poor collection of re- payments, poor remedial measures, Slow relief policies/ programs.	Up to 10% of total expenses net of taxes.
4th	Performance risks	Poor monitoring of Manager and employee performance, capabilities, unimplemented circulations of key staff, Poor internal auditing, unmanaged/ inactive  Audit/ Compliance Committee.  Poor recruitment policies, Defective salaries/ compensation schemes.	Up to 10% of total operating expenses or around P2.4 m.
5th	Market risks	Notable changes in socio – economic factors affecting financial products and services.	Subject to surveys and economic studies.
6th	Risks on plans and strategies.	Inability to increase Capital, low income generated, Extensive fund dependencies, Lack of growth, Low ROE/ ROI, V&M undone, diverted. Key result areas of plan undone, person responsible resigned/ diverted.	Up to possible decline of 5% to total asset, low capital increase by 2%, decrease in ROE/ ROI by 10%.

What the above table means are the possible declines due to risks experienced.  And Partner Rural Bank may experience the declines stated in the process.  The bank may take one the risks and assume to receive or experience the possible impacts of the risks without causing destruction and decline in the operations as they can be easily absorbed and corrected.  

• Bank – wide risk governance structure and risk management process. The appropriate strategies to manage risks include the following:

• Transferring the risk to another party;
• Avoiding the risks;
• Reducing the negative effects of the risks;
• Accepting some or all of the consequences of a particular risk.

These risk - policy considerations need to be made clear to all concerned, such as the directors, managers, heads of offices, Officers, and members of the bank’s various committees, and the internal auditors. The policy consideration and formulation are assumed to be under the president’s responsibility with the approval of the Board of Directors in a resolution. The policy covers, per BSP proposal, the following items:

• Limits and guidelines governing risk – taking including actions when risk – limits are violated, and the need to notify the board of directors and implement sanctions for excessive risk – taking.

 - The delineated responsibilities in managing risks are on:

• Preventable risks.

Internal risks, arising from within the organization, that are controllable and ought to be eliminated or avoided are preventable risks.  Examples are the risks from employees’ and managers’ unauthorized, illegal, unethical, incorrect, or inappropriate actions and the risks from breakdowns in routine operational processes. Preventable risks are better controlled through active prevention, such as, monitoring operational processes and guiding staff and officers’ behavior and decisions toward desired values and norms.

• Strategy risks.

The bank can voluntarily accept specific risks in order to generate higher or bigger returns from its strategy. A bank assumes credit risk, for example, when it lends money, while some companies take on risks through their research and development activities.  Strategy risks are quite different from preventable risks because they are not inherently undesirable. A strategy with high expected returns generally requires significant risks, and managing those risks is a key driver in capturing the potential gains. It could be a good “gambling” stake.

 

• External risks.

Some risks occur outside the bank, and beyond the bank’s own influence or control. These could be natural, social, and political disasters, or major economic events such as depressions, recessions, or downturns. External risks require an approach related to business continuity plans. Management need to focus on identifying and mitigating the external risks that can create impacts or effects to the bank.

The initial step in the bank’s move to create an effective risk-management system is to understand the qualitative distinctions among the types of risks that Partner Rural Bank faces.  Field researches and studies show that risks fall into these three categories, as mentioned above.

                     

• System for measuring risks as expressed above. The steady formulas and standard ratios can be adopted as an initial approach in measuring risks or the allowed risks that could be part of the bank’s risk appetite.
• “Check and balance” systems – could considers weighing in or ways of eliminating excessive risks against the standard practices.
• Risk – data aggregation/ accumulation, and reporting of risks. Per aggregation capabilities, the principles involved are:

• Accuracy and integrity.
• iii. Timeliness. iv. Adaptability.

In terms of actual steps and procedures in confronting the risks that crop up and hit the bank, the following steps and guidelines have to be adopted and conveyed to the crucial doers at the bank operation.

• Identify, characterize, and assess threats of risks.
• Assess the vulnerability of critical assets to specific threats.
• Determine the risk (i.e. the expected consequences of types of attacks on specific assets).
• Identify ways to reduce those risks.
• Prioritize risk reduction measures based on a given strategy.

The over – all risk governance structure and the risk management process of the banks are above relayed for guidance and control of the bank and bank’s officers themselves.

• AML governance and culture, and description of the over – all Money Laundering (ML) / Terrorist Financing (TF) risk management framework to prevent the use of the bank for ML/ TF activities.

Partner Rural Bank implements Anti – Money Laundering (AML)/ Terrorist Financing (TF) regulations strictly and consistently.  In addition, Annual AML Trainings, as part of the over – all AML governance and continuing exposure and familiarization, are conducted to cover the bank’s responsible officers, managers, and all personnel, including the security guards, to provide to all of them efficiently and adequately, the needed attitudes, cultures and education related to AML/ TF.  Enabling them to fully comply with the AML/ TF laws, regulations, and directives and issuance of updated measures are also expected. 

The bank also perceives the need for regular refresher trainings on any new AML regulations and amendments in order to ensure the sense of responsibilities on the AML related implementation, processes, policies and procedures.  These are all in the anticipation that the bank completely prevents cases of direct “money laundering” in all its branches and BL units.  In connection with these also, the bank focuses on the related “know your costumer” rules, that is, the KYC, and hence gives emphasis on record keeping, transaction reporting rule, monitoring, testing, and reporting mechanisms to address the issue of compliance to AML/ TF cases.  Major part of the risk management framework in this regard is the bank’s implementation of its KYC policies strictly enforced in all its branches and units where transactions with customers occur all the time.

6. Corporate Governance.

a. Over-all Corporate Governance Structure and Practices.

Per “Corporate Governance Principles and Policies” adopted by Partner Rural Bank, Inc. in Board Res. No. 2012 – 68, following the U.S. Sarbanes – Oxley Act, brought about by the practices of large and multinational firms and corporations where their roles and manner of doing their businesses can either strengthen or derail economies, the bank adopted early on similar corporate governance rules and regulations as set by BSP.  Corporate Governance is therefore a protection of shareholders, employees and the public from fraudulent financial practices of banks which are also decried by Partner Rural Bank. The regulation was meant to prevent manipulation, alterations and destructions of financial records of banks and regulated financial institutions in general.  The bank has adopted the promulgations and regulatory measures and to enforce strict auditing and financial regulations. Furthermore, the idea is to inject ethics, values, culture and morality on how corporate organizations particularly banking institutions are to be governed and operated to the best of their abilities and the protection of the interest of the depositing public.

  

The practices involved are the following:

• Separation of powers wherein governance is the responsibility of the board of directors, and management is delegated to the CEO and the team of other officers and all managers.
• Effective board of directors where the directors and the Board itself act with autonomy and independence from management.
• Democratic corporate boardroom, but where a system of accountability starts with the board, and
• Adopting a corporate score – card for an internal self – rating system that can measure the performance of the Board, the directors themselves, and the top/ senior management.

The assessments are done annually, every year and fed during the annual stockholders’ meetings and the election of the new directors and the officers by the next year.

• Selection Process for the Board and Senior Management.

The Board of directors of the Partner Rural Bank is composed of seven (7) directors, where three (3) could be Executive Directors, but the required majority are non – executive directors, including the required two to three (2 – 3) Independent directors.

In the selection process, the stockholders in the prior period up to the election schedule itself, choose possible independent directors first, and determine their availability and qualifications. A minimum of two (2) independent directors are sought.  A minimum of four (4) non-executive directors, on the other hand, including the independent directors are sought, identified, and selected by the electing shareholders.  The rest, or the other required directors, take the regular director positions who are expected to undertake their responsibilities on a full – time basis. All of them still constitute the seven (7) directors of the bank for a term of one (1) year.

• Board’s overall responsibility.

Aside from the usual qualification of being a director of a corporation, being a director of Partner Rural Bank is defined by the minimum age of between 25 to 30 years old.  Per BSP regulation, they need to be “fit and proper” with integrity, probity, physical/ mental fitness, competence, relevant educational and financial literacy and training, diligence, knowledge and with experiences related to banking, business and finance. 

The Board of Directors, meaning the board itself, exercises the corporate powers, the business conducts, and the control of properties of the bank. These BOD powers are conferred by laws and cannot be revoked even by the stockholders.  These powers of the BOD are held with duty to exercise sound and objective judgement for the best interest of the bank itself.

• Description of the role and contribution of the executive, non – executive and independent directors, and of the chairman of the Board of Directors.

• Chairperson of the board.

He/ she is separate and distinct from the President/ CEO to promote balance of powers.  The chairperson ensures that meetings are held in accordance with the by – laws of the corporation, supervises the preparation of the agendas, and maintain qualitative and timely communication and information between BOD and management. He/ she could be considered familiar with the Robert’s Rules or Order in organizing and conducting meetings. 

• Executive directors.

The executive directors actually are the ones steering the bank and the organization and are handling and managing the operations themselves, even to the extent of conducting and incurring handling of day – to – day operations. 

• Non – executive directors.

Non – executive directors are members of the bank’s Board of Directors but who are not part of the executive team. A non-executive director does not engage in the day-to-day management of the bank but is involved in policymaking and planning exercises.

• Independent directors.

Independent directors are persons who are director - members of the board but who do not have  material or pecuniary relationships or interests with the bank. The independent director’s role is to provide independent oversight and constructive challenges to the executive directors.

• Board composition for each member, include the following.
  • Type of directorship.
  • The principal stockholder represented, if nominee. iii. The number of years served as director. iv. of direct and indirect shares held.

                            v.     Percentage of shares held to total outstanding shares of the bank.

	Name/s	Type of directorship	Principal Stockholder represented, if nominee	No. of years served as director.	No. of shares held.	% of shares held to total Outstanding shares.
1	Nick S. Aduana	BOD Chairman/ Non – executive director	n.a.	5	420	0.1055%
2	Eugenio A. Demigillo, Jr.	Executive Director / President	n.a.	8 / 12	161,654	40.5999%
3	Ma. Amy B. Cruz	Executive Director/ COO	n.a.	20	98,500	24.7385%
4	Jesse D. Mejia	Executive Director/ Manager	n.a.	1	2,500	0.6278%
5	Annali D. Mana- ay	Non – executive	n.a.	8	12,504	3.1404%
		director
6	Alberto Arellano	Independent director	n,a.	2	5	0.0013%
7	Eduardo de Castro	Independent director	n.a.	2	25	0.0063%

• Board qualifications.

    The qualification of being a director of the corporation includes an age level of a minimum of 25 to 30 years old.  He/ she should also be “fit and proper” with integrity, probity, physical/ mental fitness, competence, with relevant educational and financial literacy and training, diligence, knowledge and experiences related to Banking, Business and Finance.  In the case of Independent directors, he/she should be capable to devote time to carry out tasks as independent director/s, and at the same time must have attended the Corporate Governance seminar within 6 months after appointment or election as Independent director.  

    The required attendance or participation to a Corporate Governance seminar is a must and is also applicable to regular directors of the bank.  All members of the board on 2020 have attended the Corporate Governance seminar/ workshops.

• List of Board – level committees including membership and function.

The Board of the bank has allowed the creation of a single board – level committee only, which is the Audit and Compliance Committee (ACC). For the year 2020, its members are Mr. Alberto Arellano, Dr. Nick Aduana and Mrs. Annali D. Mana – ay, all directors of the bank.  The head of the ACC, the only board – level committee is Mr. Alberto Arellano, a former Dept. head of the University of Southern Mindanao (USM), Kabacan, Cotabato. Sitting as sources of reports, data and information, related to auditing and compliances, are the Internal Acting Audit team (IA’s) coordinator, Mrs. Sharon Guerra, and the bank’s Acting Compliance Officer (ACO), Mr. Hailar D. Defenio.  The major function of the ACC is to receive and gather all reports and information from the bank’s Internal Auditors and the Acting Compliance Officer, and thereupon scrutinize, review, analyze, and come up with stern decisions that will be used to solve findings drawn from Audit and Compliance reports.  These Committee – level decisions will then evolve as recommendations of the ACC to the Board of Directors during either the regular meetings, or if too serious and would need immediately actions, to requested special board meeting/s.

The two other committees of the bank are the Credit Committee (Crecom) and the Information Technology Steering Committee (ITSC) which are both Management – level committees. The decisions and recommendations that they come up with are submitted to the Board during regular meetings for either the BOD confirmation of Crecom and ITSC committee – level decisions, or directly issue Board resolutions to legitimize the committee recommendations, or come up with direct approvals if beyond the authorities of the committees, such as equipment purchases, contracts, and approval of Loans beyond P700,000 pesos approving level of the Crecom.

• Directors’ attendance at Board and committee meetings during 2020.

Name/s :	Attendance to Board meetings	Attendance to Committee meetings
1. Nick S. Aduana	100%	100%
2. Eugenio A. Demigillo, Jr.	100%	No committee membership
3. Annali D. Mana – ay	100%	No committee membership
4.  Eduardo N. De Castro	87.5%	No committee membership
5. Ma. Amy B. Cruz	100%	100%
6. Alberto C. Arellano	100%	100%
7. Jesse D. Mejia	100%	100%
8. Elmer S. Caigoy	100% of 9 meetings	Replaced per regulation on majority/ minority  requirement.
9. Hailar D. Defenio	88.8% of 9 meetings	Replaced due to substitute appointment/ other function.

• Changes in the Board of Directors (for Complex banks). A.

• List of Executive Officers/ Senior Management.

Executive Officers/	Name/ s
Senior Managers
President / CEO	Eugenio A. Demigillo, Jr.	Also executive director.
Vice – Pres./ COO	Ma. Amy B. Cruz	Also executive director.
Compliance officer	Hailar D. Defenio	(in an acting capacity)
Corp. Secretary	Elmer C. Lomugdang
Finance Officer	Arlene A. Insular
Head of Accounting	Joy Lyn M. Castillon
Infotech Head	Max A. Orac
Branch Banking Head	Rodolfo A. Espina
Branch Managers	Errol A. Narvasa	Pigcawayan Main Branch, Cotabato
	Fremmer G. Omana	Kabacan Branch, Cotabato
	Mardon R5oy B. Yata	M’lang Branch, Cotabato
	Elmer S. Caigoy	Tacurong City Branch, Sultan Qudarat
	Jesse D. Mejia	Surallah Branch, South Cotabato
Internal Audit Head	Sharon L. Guerra	(in an acting capacity)
Security Officer	Eugenio A. Demigillo, Jr.	In the absence of Security consultant.

• Performance Assessment Program.

A Performance assessment program intended for the Directors as individuals, and of the Board itself as a collective unit of the directors, has been conducted around the last month of 2020 covering the year.  The corresponding assessment questionnaires for the individual directors and board as a collective group, of that of the board itself have been used and tested.  A portion of the Performance Asssessment Program to be further developed will include the performances of the key officers of the bank, particularly the President, Vice - president, Treasurer/ Finance Officer, Compliance officer, Managers, Cashiers, and possible others. More research and improvements of the assessment questionnaires used as part of the mentioned Performance Assessment Program have yet to be considered for testing and applications in the coming year.

• Orientation and Education Program.

Partner Rural Bank provides an orientation and familiarization program for incoming employees and staff related to the tasks and responsibilities they are to undertake and implement.  These are continuously done whenever new employees are hired and become permanently employed after passing the 5 – 6 months trainee and probationary employee statuses.

In case of all the already permanently employed staff, employees, and even officers and directors, Partner Rural Bank keeps on being informed of the scheduled training, workshop, seminars, and conferences conducted by the Rural Bankers Research and Development Foundation, Inc. (RBRDFI) ran by the Rural Bankers Association of the Phils. (RBAP), and other training institutions and relevant firms running their own training and seminar schemes. 

In the year 2020, because of the initiated changes and adjustments in mobility due to COVID – 19, mainly the members of the newly organized internal auditors were pushed for the Zoom Training on Impact of COVID 19 on June 19; on Strengthening of Internal Control System of Rural Banks on July 3; Risk – based Internal Audit on Oct 16 – 17;  and Internal Audit Engagement on Nov. 25, 2020 training.  All the mentioned Internal Audit trainings were conducted by the Resource persons of RBRDFI. 

• Retirement and Succession Policy.

It has been an established policy since the 1980’s that the retirement age of hired employees is up to the age of 55 regardless of the length of service rendered.  Retirement pay can then be sought by the employees at the full value of their latest salary/ wages multiplied by the number of years of service net of indebtedness or loans availed of the Financing Plan for Officers and Employees (FPOE). The retirement pay received from the bank is tax – free as provided by the related laws.

After which, the retired employees of the bank can receive their Social Service System (SSS) retirement benefits however at the age of 60 following the benefits from the bank’s retirement fund a 55. Thereafter, their pension fund from SSS could be received monthly.

In short, Partner Rural Bank has an existing retirement and separation program which has been existing since 1980 and that provides for a separate, segregated, and off - book thrust fund with another bank, i.e., Land Bank Thrust for retirement and separation of staff and employees. The trust department of Land Bank has been contracted to handle and manage the fund, and sees to it that it can, by itself, generate income through their investment program.  Information regarding the balance of the fund are sent to Partner Rural Bank regularly for monitoring and confirmation. The bank contracts Salamia Actuarial Services to regularly review the required balances of the bank’s retirement funds and recommend the filling up of the required amounts in accordance with schedules.

Furthermore, the bank has a Succession plan and program where the possible substitutes, or call it “successors of the staff”, are early identified to prevent difficulties in cases of necessary movements, deployment and changes of roles of the personnel and officers, or even resignations and discontinuations.  Mentoring and familiarization of the tasks, duties and responsibilities to be assumed by the “successors” are continually done by the staff, manager, officers, to be conceived and imagined to be replaced.  Results and effects are monitored regularly by the COO where written tables/ log - books are kept on record. Successors of officers and top management are kept and logged by a designated director to do the recording, Mrs. Annali D. Mana – ay, and jointly with the corporate secretary.  

The bank, however, has not yet adopted a retirement concept for members of the board or term limits. Due to the current limitation of getting directors, both regular and independent , the bank has not yet considered their retirement consideration.

n. Remuneration policy.

                       i.         Remuneration Policy and Structure for Executive and Non – executive Directors. 

Executive directors engaged in continuous Day – to – day operations if at the level of management earn remunerations ranked within and identified in the bank’s Compensation and Salary Benchmarks Table.  Executive directors with the rank of President and Vice - president and are engaged in day – to – day operations are compensated based on skills, capabilities, experiences, talents and responsibilities, and in certain cases, comparable to rates in other rural banks or the industry practices within the region.  

Non – executive directors, based on regulations of the Corporation Code in the Philippines, and BSP MORB, received regular honorarium/ per diem for attendance to meetings equally to all the directors, mainly covering their expenses in attending meetings, either physically or electronically. 

Executive as well as the Non – executive directors are not beneficiaries of the Retirement and Separation Fund of the bank. Neither do they benefit from the SSS, PhilHealth and the Pag- ibig Fund programs.

 ii. Remuneration Policy for Senior Management.

Senior management staff remuneration are considered part of the remuneration policies applicable to all employees where a benchmark of roles and tasks are maintained to guide possible changes and upgrading of ranks and positions of employees (except the president and vice – president) are marked.  The benchmark indicates the payment and salary schemes applicable to the rank – and – file employees up to the managerial levels.

• Policies and procedures on “Related – party transactions”.

It has been an internal policy of the bank since its founding year in 1978 and up to now to avoid and prohibit cases of DOSRI loans.  The bank ever since has “banned” DOSRI loans.  As an extension of this same policy, the bank has also prevented dealings and arrangements with “two parties who are joined by pre- existing business relationships or common interests”, or by itself relate to such parties specially through loans, credits and large non – loan transactions. Although related – party transactions are themselves legal, they can create conflicts of interests or lead to other illegal situations if abused.  Cases of lending and granting privileges to “related – party transactions” are avoided, just as the bank has banned cases of DORSI loans over the years. 

• Overarching policies and procedures for managing related party transactions.

Cases of loans or loan applications of possible “related – party transactions” are outright rejected or denied by the bank,  and related parties are enjoined to transact with other financial institutions instead.

• Conglomerate structure.

The bank does not have conglomerate structures, connections, and similar links.  

• Material RPT’s.

Although a number of its shareholders also have their own businesses, e.g. hardware stores, construction materials trading,  construction and engineering business, or rice and corn trading, “related – party transactions” are banned. The bank however have only a leasing/ renting agreement for a garage for the bank’s vehicles, or motorcycles in Pigcawayan branch and H.O., and storage of records and files in the same mini - property near the bank’s building by the son of a shareholder and a preferred share investor, covered by a contract and approved by the board of directors some eight (8) years ago and is to expire by next year.

• Self – Assessment Function.

Self – assessment is part of the employee appraisal within Partner Rural Bank where personnel or employees are encouraged to provide their own versions of their performances and exercises over the year 2020, or even much earlier.  Self – assessment could also be treated as the bank’s ability to improve themselves without having to undergo the efforts of an external performance appraiser, although it could be more convenient to contract 3^rd party service providers for employee assessments, and also costlier however.  For the bank, it is like immediately finding the weaknesses and the strengths within the banks’ units or branches as they diagnose certain solutions to personnel problems. Aside from being a formal employee appraisal, the bank’s self – assessment of its employees could also be important for their professional and personal developments. 

• Self – assessment makes employees confident about themselves and their capabilities, and enhances capacity – building;
• Self – assessment provides directions for trainings, where the employees themselves can choose the right training they need and fit their career requirements;
• At best, self- assessment function provides an objective evaluation of the employees by themselves and where they can state their own targets and goals of their work - and assess their own performance. These could be done along with the target settings and planning for every succeeding years.

Self – assessment monitoring and their recording could also be done parallel with the Internal Audit activities of the internal audit team of the Partner Rural Bank. 

• The structure of internal audit and compliance functions including its role, mandate/ authority, and reporting process.

The bank has divided its areas of operations into three (3) parts or sections: the Pigcawayan –

Alamada – Midsayap area, the Kabacan – M’lang – Kidapawan area, and the Tacurong – Surallah – Lambayong area.  Specific branches and branch – lites correspond to the specified area where each of the three (3) Internal Auditor are designated and assigned. Along the way, self – assessment activities could also be included.

The internal auditors, including the single yet still Acting Compliance Officer, Mr. Hailar D. Defenio, are all considered “independent”, meaning, all of them are not subject to the control and supervision of management, managers and executives.  They all report and take up their information, data, and related issues to the Audit and Compliance Committee (ACC) headed by an Independent Director. The ACC then directly give reports to the board of directors.

• The review process adopted by the Board to ensure effectiveness and adequacy of the internal control system.

 The Board of directors of Partner Rural Bank has instituted the Auditing and Compliance Committee (ACC) who receives and takes up the reports submitted by the internal auditors, including that of the compliance officer. The reports and cases involving results of self – assessments can also be submitted to the ACC for deliberation and analysis.

At the lower level however, the Internal Auditors and the compliance officer already take up and elaborate their findings at the level of branches and branch – lites, during their exit conferences in the presence of the branch managers and staff, and find the roots causes of the findings.   

• Dividend policy.

Partner Rural Bank’s dividend policy evolved out as a cordially established “gentlemen agreement” that structured its dividend payout to the shareholders through time. The key concern then during the bank’s early years in the 1980’s is whether the directors can always agree among themselves to declare dividends only when the bank’s operation are satisfactory, and the income generated are substantial.

For the bank, dividend payments and declarations are often felt as obligations to repay, assist, and help the shareholders, especially the veterans and retirees and already old shareholders, as they have also provided some sacrifices during the bank’s early years. The shareholders of the bank roughly understand that the financial system of the bank does not required the bank to pay dividends.  However, with the executive officers’ commitment to support the stockholders, specially regarding their medical and hospitalization requirements, the bank’s Dividend Policy is viewed as an integral part of the bank’s social and senior stockholder assistance strategy of encouraging possible new capital inflows all the time, even prior to dividend declarations. Management, on the other hand, always suggest the dividend amount, timing, and other factors that influences and defines the Dividend payment policies so as not to affect the management goals and targets also.

In 2020, the corporation paid cash dividends of ₱1,773,738.00 net of taxes amounting to ₱197,082.00 for common shares, and ₱252,000 net of taxes amounting to ₱28,000 for preferred stocks.

• Corporate Social Responsibility initiatives.

Partner Rural Bank viewed Corporate social responsibility (CSR) as a self-regulating business - related concept that can help the bank to be socially accountable—to itself, its stakeholders, and the public. Through CSR, the bank could be considered by others as aware of a possible impact the bank has on other aspects of society or the nation or nature, including economic, social, and environmental concerns.

Aware of the possible impact of well selected CSR initiative, Partner Rural Bank however has to make the choice of selecting its CSR focus.  The bank is conscious of the fact that a CSR view could be a broad concept that can take many forms given the bank’s “banking nature”.  Through CSR programs, philanthropy, donations, and volunteer efforts, the bank’s businesses can benefit a segment of the community or the larger portion of society while boosting the brands of the bank’s products.  Partner Rural Bank views supporting Food Security, Agricultural Development, Poverty Alleviation and

Financial Integration, as templates for the bank’s CRS.  For the past decades, the bank has to focus on Food Security and Agricultural stability given the warnings and global problems brought and clarified by the United Nations’ Food and Agricultural Organizations (UN – FAO).  The bank however will need more experts to conceptualize the introduction of the CRS that is now related to electronic banking, online banking, and financial integration of rural communities to the banking sector and financial industry.

Furthermore, while a CSR is for the community, it is equally valuable for the banks internal concerns. CSR activities can help forge a stronger bond between employees and the bank, boost morale and help both employees and employers feel more connected with the world, environment, and nature around them.

s. Consumer Protection Practices.

Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. (Wikipedia). What is targeted here are the fraudulent acts and unfair practices that can affect banking customers.  The Partner Rural Bank has been focusing on the prevention, control, and awareness of cases of fraud and bad practices ever since, specially now with the advent of on – banking, electronic banking, and digitalization of banks in general.  It is not only the security of the bank which the board and senior management are concerned with, but mainly the protection of the bank’s customers and clients themselves as they transfer and transact using  their own funds as depositing and paying public.  The bank has to make sure that the depositing, transacting and paying public are not fooled by mal - practices within the bank by its own personnel, and by the bank, itself by adopting un – sound practices.

• Role and responsibility of the Board and Senior Management for the development of consumer protection strategy and establishment of an effective oversight over the bank’s consumer protection programs.

The Board and Senior Management initiated a consumer protection strategy by first making sure that all the business centers of the bank, meaning the five (5) Branches and the three (3) branch – lites, are properly upholding customer protection practices as their priority consideration in dealing with customers. Customer protection starts with the proper and market - acceptable pricing  of the banks products, whether loans, credits, savings and deposit – taking, fund transfers and remittances.  In loans alone, the strict implementation of the Disclosure statements, presentation of the effective interest rates, and other deductions that can influence the price of loan products, must be revealed to the customers. Among savings and deposit products, the cost and the conveniences have to be posed and discussed among depositors.  Fees and the charges in the ATM services have to be publicized and properly explained.  Finally, the internal auditors are in part tasked to check, monitor and ensure that each branch and branch – lite deploy delegated staff in charge of “Customer Assistance Desk”.

In the case of electronic banking, such as ATM withdrawals and other transactions, customers with complaints are made to submit the “Receiving and Acknowledging Complaints/ Request Form” of the bank where the nature of the Complaint/ or Request details and reason are submitted. Actions to be taken to resolve the complaint are stated at the bottom. 

In case of electronic counterfeiting and frauds, the banks’ membership with BancNet provides the safety - net in cases of massive or technically difficult cases of counterfeiting and frauds that can affect the banking system or the financial industry, or sections of them. Cases affecting e – banking are circularized by BancNet to its members. 

• The consumer protection risk management system of the bank.

         The bank’s ATM system and Network Policy will be expanded to included critical items related to consumer protection and risk management concern arising as the suggested “digitalization” of banks are pursued by BSP itself. In all branches and branch – lites, with electronic banking in place, mainly with the installed ATM machines and centralized data system in the main  branch, the coreware or the system are open to many, the need to protect the bank, and protect directly the consumers, customers, and clients.  Each branch and branch – lite have an employee designated as their protector – the Consumer / Customer Assistance Desk (CAD) whose desks also include protection from risks. 

• The consumer assistance management system of the bank which shall include the consumer assistance policies and procedures as well as the corporate structure for handling complaints. Partner Rural Bank will pursue and upgrade its system into a broader “Consumer Assistance management system” by next year, although a more – or – less a management - held and administered handling of complaints are already done and implemented by, and with the assistance of, the bank’s Information Technology center/ unit. The CAD is also part of the consumer assistance management system of the bank.

• Corporate information.

• Organizational structure, including the name and position of key officers.

Key Officers:	Name/ s:
President / CEO	Eugenio A. Demigillo, Jr.	Also Executive director.
Vice – Pres./ COO	Ma. Amy B. Cruz	Also Executive director.
Compliance officer	Hailar D. Defenio	(in an acting capacity)
Corp. Secretary	Elmer C. Lomugdang	Also Administrative officer
Finance Officer	Arlene A. Insular
Head of Accounting	Joy Lyn M. Castillon
Infotech (IT)  Head	Max A. Orac
Human Resource	Joolia Angelica L. Demigillo	Appointed until end of 2020.
Branch Banking Head	Rodolfo A. Espina	Coordinates with all branches/ BL’s
Branch Managers	Errol A. Narvasa	Pigcawayan Main Branch, Cotabato
	Fremmer G. Omana	Kabacan Branch, Cotabato
	Mardon Roy B. Yata	M’lang Branch, Cotabato
	Elmer S. Caigoy	Tacurong City Branch, Sultan Qudarat
	Jesse D. Mejia	Surallah Branch, South Cotabato
Internal Audit Head	Sharon L. Guerra	(in an acting capacity)
Security Officer	Eugenio A. Demigillo, Jr.	In the absence of Security consultant.

• List of major stockholders of the bank, including nationality, percentage of stockholdings

and voting status. Common shares:

	Name/s	Nationality	Percentage of Common Shares Stockholdings	Voting status.
1.	Eugenio A. Demigillo, Jr.	Filipino	40.599%	Voting
2.	Ma. Amy B. Cruz	Filipina	24.735%	Voting
3.	Mrs. Aniceta R. Vinluan	Filipina	7.5873%	Voting
4.	Eufrocina D. Buenaflor	Filipina	5.5801%	Voting
5.	Juliet B. Guilloreza	Filipina	3.9152%	Voting
6.	Annali D. Mana – ay	Filipina	3.1404%	Voting
7.	Raymundo B. Franco	Filipino	1.9668%	Voting
8.	Ma. Boanuette T.D. Ramos	Filipina	1.7548%	Voting
9.	Shaila B. Ballano	Filipina	1.6348%	Voting
10.	Herminio D. Defenio Sr.	Filipino	1.4564%	Voting
11.	Exaltacion D. Defenio	Filipina	1.7151%	Voting
12.	Lilibeth B. Ardina	Filipina	1.0508%	Voting
13.	Partner RB EM Cooperative	Filipino	1.0046%	Voting
14.	Junette L. Trinidad	Filipina	0.9529%	Voting
15.	Jessie D. Mejia	Filipino	0.6279%	Voting
16.	Teresita C. Salomon	Filipina	0.5950%	Voting
17.	Aida E. Valladares	Filipina	0.5950%	Voting
18.	Rizal A. Saligumba	Filipino	0.5036%	Voting
19.	Elmer S. Caigoy	Filipino	0.5023%	Voting
20.	Maximo A. Orac	Filipino	0.2009%	Voting
21.	Ariel H. Potian	Filipino	0.1125%	Voting
22.	Nick L. Aduana	Filipino	0.1055%	Voting
23.	Joolia Angelica L. Demigillo	Filipina	0.0979%	Voting
24.	Hailar D. Defenio	Filipino	0.0942%	Voting
25.	Eduardo N. de Castro	Filipino	0.0063%	Voting
26.	Alberto C. Arellano	Filipino	0.0013%	Voting
	Sub – total Common shares		100.0000%

Preferred shares:

	Name/s	Nationality	Percentage of Preferred Shares	Voting status.
1.	Dr. Anthony J. Bulaclac	Filipino	50%	Non - voting
2.	Estrella C. L. Demigillo	Filipina	10%	Non - voting
3.	Francisco C. Cruz	Filipino	9.5%	Non - voting
4.	Aniceta R. Vinluan	Filipina	5.0%	Non - voting
5.	Annali D. Mana - ay	Filipina	4.75%	Non - voting
6.	Diana B. Cruz	Filipina	3.75%	Non - voting
7.	Stephani B. Cruz	Filipina	3.75%	Non - voting
8.	Emily B. Cruz	Filipina	3.75%	Non - voting
9.	John Paul B. Cruz	Filipino	3.75%	Non - voting
10.	Lilibeth B. Ardina	Filipina	2.75%	Non - voting
11.	Shaila B. Ballano	Filipina	1.25%	Non - voting
12.	Ma. Boanuette T.D. Ramos	Filipina	0.88%	Non - voting
13.	Teresita C. Salomon	Filipina	0.88%	Non - voting
	Sub – total Preferred shares:		100.00%

• List and description of products and services offered.

	Credit/ Loan products:	Descriptions:
1.	Agricultural production and crop loans.	Mainly small – scale agri – land owners and agric- leases, and are engaged in rice, corn, and plantation crops such as sugar, banan, oil palm, pineapple, fruits and vegetables, and also livestocks such as hogs, chicken, and goats.

2.	Agri – businesses.	Medium scale plantation and farms,devoted to higher – valued crops, fruits, vegetables, livestocks, either sold for export or domestically, and either run by solo proprietors, entrepreneurs or corporations and farmer – cooperatives.
3.	Commercial loans.	In provinces like Cotabato, commercial borrowers are mainly those business engaged in trading, trader – millers, buy – and  - selling operators, fish – livestock – vegetable stores, hardware stores, pharmaceutical and medical stores, commercial malls and establishments, buildings, stores, commercial malls and establishments, and service services.
4.	Industrial loans.	Mills, manufacturing plants, warehouses, welding, construction and machine shops, farm tractor fabrication and design shops, etc.
5.	Micro/ Small/ Medium Enterprises (MSME).	Enterprises that hire employees such as bakeries, restaurants, welding shops, hair and beauty salons, electronic and appliance stores and repair shops, travel lodges and small pension houses, etc. with total assets of ₱150,000 up to ₱5.0 million.
6.	Market vendor and stall- holders Money – shop loans. (MVSH – MS)	Store owners and commercial stall holders and operators, or enterprises renting stalls and commercial sites, and located within the municipal or city public markets.
7.	Big Business loans (BBL’s).	Any type or any purpose of the loan concerned where the amount applied exceeds ₱1.0 million up to a maximum of ₱3.0 million.  Maturities of the BBL are not less than a year, and up to 3 years, and paid in monthly, quarterly or semi – annual installment.
	Deposit/ Saving products:	Descriptions.
	The bank has four (4) saving and deposit products – these are mainly to push further with the mobilization of saving and the proper use of depost – taking facilities.
8.	Passbook Savings	Ordinary and traditional saving accounts with passbooks.
9.	Saving Account with out passbooks but with ATM cards.
10.	Saving Accounts of either (1) or (2) but with Mobile banking services through  cell/ smart phone.
	Certificate of Time Deposits.
11.	Short – term Time deposits.	Maturing either for a quarter, semi – annual and annually. Interest rates earned are subject to taxes.
12.	Special Partner’s Optimum Saving.	SPOS, in short, are time deposits of not less than 5 years in maturity, and are therefore relieved of the usual 10% final tax on interest earned.
13.	Checking Accounts.	Deposits with the bank are used to support issuances of checks by the depositors. A minimum of average monthly deposits are maintained by the check issuer, and charges are made for lesser maintaining balances. The checking account deposits do not earn interests.
	Payment and Fund transfer systems.
14.	Accept remittances.
15.	Bills payment through ATM cards.
16.	Fund transfer system	Limited fund transfer through payouts up to the
	through Instapay P2P.	amount of ₱50,000.00
17.	Unlimited fund transfer via P2M.	Unlimited payment and receiving of funds by P2P and P2M.
18.	Use of QR codes.

• Bank Website. https://www.partnerbank. com.ph.

• List of banking units domestic and abroad included.

1.	Head Office	2nd Floor, Pigcawayan Main Bldg., J.P.Laurel St., Pob.2, Pigcawayan, Cotabato.
2.	Pigcawayan Main Branch	Pigcawayan Partner Rural Bank Bldg.,  Pobl. 2, Pigcawaya, Cotabato.
3.	Kabacan Branch	Partner Rural Bank Bldg., Rizal Ave., National Highway, corner Mapanao St., Poblacion, Kabacan (USM town). Cotabato.
4.	M’lang Branch	Partner Rural Bank Bldg., Jose P. Rizal St., Poblacion, M’lang, Cotabato.
5.	Tacurong City Branch	Partner Rural Bank, Door 3, Astillero Bldg., Bonifacio St., Poblacion, Tacurong City, Sultan Kudarat Province.
6.	Surallah Branch	R. Villanueva Bldg., 677 Kamia St., Poblacion, Surallah, South Cotabato Province.
7.	Alamada Branch – lite	J. P. Laurel St., Brgy. Kitacubong, Alamada, Cotabato Province.
8.	Kidapawan City Branch - lite	Sorongon Bldg., Dayao St., Kidapawan City, Cotabato Province.
9.	Lambayong Branch - lite	Florzen Bldg., National Highway, Poblacion, Lambayong, Sultan Kudarat Province.

• Audited Financial Statements (AFS) with Auditor’s Opinion.

II.  Compliance with Appendix 63 c of the MORB – Disclosures  in the Annual Reports and        Published Statement of Condition.

A. Capital Structure and capital adequacy.

• Tier 1 capital and a breakdown of its components;

• Paid – up Common stocks - ₱35,792,700.00
• Paid – up Perpetual and non – cumulative preferred stocks -      4,000,000.00
• Retainned earnings -   26,184,868.03
• Total Tier 1 capital - ₱65,977,568.03

• Tier 2 capital and a breakdown of its component;

                           General Loan – loss provision   -            ₱ 1,390,670.38

• Deductions from Tier 1 (50%) and Tieer 2 (50%) capital - none
• Total qualifying capital - - ₱ 67,368,238.41 Capital requirements for credit risk   -   235,417,139.93
  • Capital requirements for market risks                                -    
  • Capital requirements for operational risks                 -      51,021,058.21
  • Total and Tier 1 capital adequacy ratio

                        on both solo and consolidated bases -                                       -      23.52%

 

 

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