1 COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT Country Builders Bank, Inc. (A Rural Bank) (CBB) started operations as a newly merged bank last November 7, 2017 after it merged with First Macro Bank, Inc. (A Rural Bank). CBB now has a combined branch network of thirty six (36) branches and micro banking offices majority of which are located in Metro Manila and the surrounding provinces of Cavite, Laguna, Rizal and Bulacan areas. The Bank serves a broad and diverse clientele including micro, small and medium enterprises (SME), agricultural businesses, businessmen, professionals, teachers, vendors, employees and households in its respective communities. CBB Vision: • To be the leading community bank in the country CBB Mission • To provide excellent banking and financial services • To create better communities by nurturing entrepreneurs • To cultivate commitment to excellence whereby employees can learn, grow and be self- fulfilled • To optimize earnings for the benefit of all stakeholders Core Values Excellence. To ensure excellence in service and banking competency to attain client trust and loyalty Integrity. To honor the trust of and the fiduciary responsibility to clients Innovative. Matching banking products and services to clients’ needs Professionalism / Teamwork. A team of committed employees instilled with passion, dedication and pride in their work Service-Oriented. To integrate the bank within the communities it serves
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COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT · 1 COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT Country Builders Bank, Inc. (A Rural Bank) (CBB) started operations
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COUNTRY BUILDERS BANK, INC. (CBB)
2017 ANNUAL REPORT
Country Builders Bank, Inc. (A Rural Bank) (CBB) started operations as a newly merged bank
last November 7, 2017 after it merged with First Macro Bank, Inc. (A Rural Bank).
CBB now has a combined branch network of thirty six (36) branches and micro banking offices
majority of which are located in Metro Manila and the surrounding provinces of Cavite, Laguna,
Rizal and Bulacan areas.
The Bank serves a broad and diverse clientele including micro, small and medium enterprises
(SME), agricultural businesses, businessmen, professionals, teachers, vendors, employees and
households in its respective communities.
CBB Vision:
• To be the leading community bank in the country
CBB Mission
• To provide excellent banking and financial services
• To create better communities by nurturing entrepreneurs
• To cultivate commitment to excellence whereby employees can learn, grow and be self-
fulfilled
• To optimize earnings for the benefit of all stakeholders
Core Values
Excellence. To ensure excellence in service and banking competency to attain client trust and
loyalty
Integrity. To honor the trust of and the fiduciary responsibility to clients
Innovative. Matching banking products and services to clients’ needs
Professionalism / Teamwork. A team of committed employees instilled with passion, dedication
and pride in their work
Service-Oriented. To integrate the bank within the communities it serves
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Message from the President:
Country Builders Bank, Inc. (CBB) has ventured once again into another major milestone
exactly five(5) years from the date of consolidation of Country Rural Bank of Taguig, Inc. and
Builders Rural Bank, Inc. on November 5, 2012.
On November 7, 2017, CBB started operations as a merged bank with another rural bank, First
Macro Bank, both with more than 50 years of existence. The merged bank is now the largest
rural bank in Metro Manila with 36 branches and MBOs, more than half of which are located in
Metro Manila, thus contributing greatly to the financial inclusion advocacy of the BSP in the
densely populated Metro Manila areas catering to the CDE socio economic classes of the
economy.
The merged bank now covers additional areas in Metro Manila and the surrounding areas of
Cavite, Laguna, Rizal and Bulacan with a combined workforce of 369 officers and employees.
CBB's results of operations in 2017 include the 2017 operations of FMB after the banks merged
in November, 2017.
Financial Highlights (Based on Audited FS)
Account 2017 2016 Remarks
Total Assets 2,800,645,665 2,062,628,009 Increased by 36%
Loans and Receivables – Net 1,070,201,284 776,770,326 Increased by 38%
Total Deposits 2,365,013,362 1,575,034,783 Increased by 50%
Net Income 28,698,336 21,412,322 Increased by 34%
Return on Equity 9.55% 8.17% Decreased by 1.38%
Financial Summary
Minimum Required Data Parent Bank (Solo)
2017 2016
Profitability
Total Net Interest Income 101,315,615.00 95,272,586.00
Total Non-Interest Income 95,080,772.00 75,352,166.00
Total Non-Interest Expenses 150,858,502.00 124,904,734.00
Pre-provision profit 45,537,885.00 45,720,018.00
Allowance for credit losses 9,434,527.00 13,893,000.00
Net Income 36,103,358.00 31,827,018.00
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Selected Balance Sheet Data
Liquid Assets 1,420,773,252.00 1,002,427,207.00
Gross Loans 950,607,428.00 673,386,426.00
Total Assets 2,800,645,665.00 2,062,628,099.00
Deposits 2,365,013,362.00 1,575,034,783.00
Total Equity 327,053,978.00 274,124,575.00
Selected Ratios (108,578,325.00) (213,468,741.00)
Return on Equity 9.55 8.17
Return on Assets 1.18 1.07
Capital Adequacy Ratio 17.58 18.27
Others
Cash dividends declared 5,136,566.00 -
Head Count
Officers 60 60
Staff 309 304
In 2018, CBB will focus on the structural framework of the bank, especially, IT. The IT plans
for the merged bank have been greatly challenged with the BSP approval on the use of cloud
technology for banks. The actual integration of the IT systems of the merged banks and the
transfer of the disaster recovery sites have been greatly affected by the availability of cheaper
and more flexible technology brought about by the cloud technology.
We have sent a request to the BSP for the use of the cloud technology through Amazon web
service for our CASA, loans and accounting system..
In 2018, emphasis on increasing the loan portfolio of the bank will be done. More account
officers will be hired and continuous training will be done for all account officers and branch
manager
In 2017, one of the branch site of CBB, the Pembo branch, has been declared in the fault line of
Makati. This will be transferred to another area in Pembo which is not in the fault line
for earthquakes.
Our greatest challenge now is the competition on loans from commercial banks. Commercial
banks are approaching our existing borrowers with lower rates of interest. CBB has met this
challenge by matching the interest rates offered by these banks. This has lowered the bank's
profit margins so the bank now is on an aggressive campaign to increase its loan portfolio by
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giving incentives, developing and training more account officers and reducing the processing
time for loans. In fact the credit committee meets almost daily as needed.
Board of Directors
The operations and management of Country Builders Bank is anchored on a unified commitment
to good corporate governance. It is led by a functioning Board of Directors and Management
team with competence, integrity and dedication, fully embracing the Bank’s mission, vision, and
values and guided not only by the Bank’s principles, but also by the principles of good corporate
governance – integrity, fairness, accountability, and transparency. Accountability of the Board of
Directors and Management are in place and implemented in accordance with high ethical
standards and strict regulatory compliance. The Board is attuned with the reforms imposed by
BSP and other regulators to elevate corporate governance practices.
The authorities of the members of the Board are derived from the Articles of Incorporation, and
the relevant sections of the Manual of Regulations (MORB) issued by the Bangko Sentral ng
Pilipinas (BSP), as the lead regulator for banks. The role of the Board and its committees are
well described and understood by the members that guarantee smooth performance of their
collegiate and individual duties and responsibilities. The Board is responsible for ensuring that
management maintains an appropriate system of internal controls which provides assurance of
effective operations, internal financial controls and compliance with rules and regulations.
The Bank considers that it has a robust governance framework with a clear organisational
structure, well defined, transparent and consistent lines of responsibility and effective processes
through which to identify, manage, monitor and report risks to which it is or might be exposed. It
has appropriate internal control mechanisms, including sound administrative and accounting
procedures and Information Technology (IT) systems and controls.
o The Role of the Board
The Board’s role is to provide leadership of the Bank and promote its vision, values, culture
and behaviour, within a framework of prudent and effective controls, which enables risk to
be assessed and managed. The Board also ensures that its obligations towards its
shareholders and other stakeholders are understood and met.
The Board is accountable for ensuring that, as a collective body, it has the appropriate skills,
knowledge, diversity and experience to perform its role effectively. The Board is
collectively responsible for the long-term success of the Bank; it sets the Group’s strategic
objectives, integrates sustainability into the way business is conducted, ensures that the
necessary financial and human resources are in place for the Group to meet its objectives
and reviews management performance. Furthermore, the Board has the responsibility to
present a fair, balanced and understandable assessment of the Company’s position and
prospects, including annual and interim financial statements and other price-sensitive public
reports and reports required by regulators and by law.
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The Board is the decision-making body for all matters of importance that are significant to
the Bank as a whole because of their strategic, financial or reputational implications or
consequences. The appointment of individuals who may have a material impact on the risk
profile of the Bank is also subject to Board approval. Their appropriateness for the role is
monitored on an on-going basis. The Board is also responsible for determining the nature
and extent of the principal risks it is willing to take in achieving its strategic objectives and
ensuring the maintenance of an effective risk management and oversight process across the
Bank.
BOARD COMPOSITION
Board of Directors Share
holdings
%
Holdings
No. of
Years as
Director
1 Dakila B. Fonacier, CPA (Chairman)
Non-Executive
244,929 14.11% 2
BSBA - Accounting
MBA - Northwestern University (Chicago, USA)
Philippine Stock Exchange
Director
May 2011 – present
Securities Clearing Corporation of the Philippines
Independent Director
May 2011 – present
Bureau of Internal Revenue
2000 – 2001
Department of Finance – Undersecretary
2000 – 2001
2 Rodrigo B. Supeña, CPA 126 .01% 5
Member
Non-Executive
BSC – Accounting
MBA – Ateneo
Country Builders Bank, Inc.
– Chairman 2012 – 2015
Land Bank Leasing Corporation
– Director 2000- 2011
Land Bank (Various)
– SVP 1997 – 2005
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Bank of the Philippine Islands
– VP 1994 – 1996
3 Ma. Corazon L. Miller, CPA 88,175 5.08% 5
Member
Executive
BSBA – Accounting
MBA – UP
UP Business Research Foundation Trustee
Country Rural Bank of Tagig, Inc. – President
University of the Philippines
– Senior Lecturer 1971 – 1979
Builders Savings & Loan Association Inc.
– President 1991 – 1997
CCH Computax, Inc.
– Tax Analyst (USA) 1987 – 1990
4 Renato R. Reyes, CPA
Member
86,120 4.96% 5
Non-Executive
Bachelor in Business Administration
MBA – UP
Marie France Group of Companies
– Director 1988 to present
Miracle Soybean Food International Corp.
– President / Chairman 2010 to present
Taganito Mining Corporation
– President 1986 – 1991
5 Celenita V. Francisco Member 50 .00% 5
Executive
BSBA – Accounting
MBA – Ateneo
CARD SME Bank
– Consultant of IFC 2009 – 2011
Philippine Deposit Insurance Corp.
– Consultant 2008 – 2010
Department of Finance
– Chief of Staff 1992 – 1996
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6 Edgardo L. Valenzuela, Jr. 22,043 1.27% 4
Member
Executive
B.S Electrical Engineering
M.S.A. – Ateneo
Efficio Technology Services – 2013
Builders Rural Bank, Inc. 2006-2012
I Link – Pinoys
– Managing Director 2005 – 2006
Accenture
– Senior Software Engineer 2003 – 2004
Wireless Internet Solutions
– Senior Analyst 2000 – 2003
7 Benjamin C. Arciaga, CPA
Member (Independent)
350 .02% 4
Non-Executive
BSBA – Accounting
Banco Alabang
– Credit Risk Officer/ Director 2013
Banco Alabang, Inc.
– VP/Director 1997 – 2013
Bangko Sentral ng Pilipinas
– Bank Officer II 1974 – 1997
8 Ramon C. Reyes, CPA
Member (Independent)
50 .00% 5
Non-Executive
BS Commerce – Accounting
MBA – PCU
Filipino Savers Bank (A Rural Bank)
– Independent Director 2004 – 2011
Bangko Sentral ng Pilipinas
– Manager II 1978 – 2003
9 Carmelita G. Salgado, CPA
Member (Independent)
85 .01% 1
Non-Executive
BS Business Administration
MBA – Australia
8
Credit Information Bureau, Inc. (CIBI) Foundation, Inc. – Treasurer/Trustee 2017
Phil. Foundation for Cultural & Educational Development, Inc.
– Vice President
Parents for Education Foundation, Inc. – Exec. Vice President 2008 – 2017
University of the Philippines Business Research Foundation, Inc. – Trustee
BOARD LEVEL COMMITTEES
Board And Management Committee Number/ Composition Of Committee Members
Audit Committee 3 Board Members
At Least Two (2) Independent Directors
Risk Management Committee 3 Board Members
Corporate Governance Committee 3 Board Members
At Least Two (2) Independent Directors
Credit Committee 2 Board Members
Bank Manager/Designated Officer
Additional 1 BOD As Alternate Member
Nominations Committee 3 Board Members
One (1) Independent Director
Executive Committee 3 Board Members
EXECUTIVE COMMITTEE
The Executive Committee of the Bank has the power to direct the overall business of the Bank
including the review and approval of proposals and transactions related to credit in amounts
within the limits of its delegated authority.
AUDIT COMMITTEE
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The Committee assists the Board in the effective discharge of its responsibilities in the areas of
statutory reporting, internal control systems, risk management systems, insurance and legal
proceedings, and the internal and external audit functions.
It reviews and prepares the internal audit program. It monitors and evaluates the adequacy of the
Bank’s internal control systems and procedures and makes recommendations to further
strengthen the systems and procedures.
RISK COMMITTEE
The Committee exercises the oversight function over risk management activities of the Bank. It
reviews the Bank’s management framework, assesses to determine the adequacy of its risk
management, monitors the Bank’s risk management profile and ensures that the risk strategies
are being complied with.
CORPORATE GOVERNANCE
The Corporate Governance Committee assists the Board in fulfilling its corporate governance
responsibilities, and ensures the Board's effectiveness and due observance of sound corporate
governance principles and guidelines, and its oversight of the Bank's corporate governance with
respect to laws, rules and regulations on corporate governance issued by the government
regulatory bodies.
CREDIT COMMITTEE
The Committee assist the board in fulfilling its responsibilities by providing oversight of the
credit and lending functions and strategies and objective of the bank, specifically:
• Oversight of the credit risk management of the Bank, including reviewing internal credit
policies and establishing portfolio limits;
• Reviews the quality and performance of the Bank’s credit portfolio; and
• Approves loans at thresholds determined by the Bank’s Credit Policy Manual.
o Meetings of the Board of Directors
The Board meets on a monthly basis and has a formal schedule of matters for consideration.
The Board receives regular reports and presentations from the Bank’s senior management on
strategies and developments in operations. Regular reports are also provided on existing and
emerging risks, risk management, credit exposures and the loan portfolio, asset and liability
management, liquidity, litigation, compliance and reputational issues.
During 2017 the Board held 15 meetings. Further details on the number of the meetings of
the Board and its committees and attendance by individual Directors are set out below.
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Name of Director Designation Attendance %
Dakila B. Fonacier Chairman 13 87
Ma. Corazon L. Miller President 15 100
Renato R. Reyes Member 14 93
Rodrigo B. Supena Member 13 87
Celenita V. Francisco Member 15 100
Edgardo L. Valenzuela, Jr. Member 15 100
Benjamin C. Arciaga Member 15 100
Ramon C. Reyes Member 15 100
Julieta L. Santos (6 months) Member 6 Resigned
06/30/17
Carmelita G. Salgado (6 months) Member 7 88
Board and Management Committees:
1. Executive Committee:
Name of Director Attendance %
Ma. Corazon L. Miller Chairman 10 100%
Rodrigo B. Supena Member 8 80
Edgardo L. Valenzuela, Jr. Member 10 100
Anna Liza B. Santiago (Non-Director) Member 10 100