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Over the past two years, the Bank earned a rating of CAMELS 4 from the Bangko Sentral ng Pilipinas; the first time in many years that we have accomplished this. This growth is a testament to the pure effort, hard work and dedication of our staff, of Senior Management, and our Compliance and Audit officers.
Nonetheless, growing pains go hand in hand with progress and growth. In order to progress, banks have had to overcome much adversity resulting from the vicissitudes which have occurred in our business in the last few years. In this regard, competition among banking institutions, regardless of size and scope continues to deepen. Our own Bank is not an exception. We continue to seek and determine new and more efficient technologies with which to surmount and counteract the challenges confronting us in the industry today, as well as utilize these technologies as a vehicle to our advancement.
As of 31 December 2014, the Bank realized total resources of P1.237 billion, or an increase by 0.98 percent from the previous year. There was also an increase in Available for Sale Securities and Due from BSP by 14.04 percent and 54.46 percent respectively. The year ended with a net income of P14.268 million or a decrease of 27.30 percent from last year. It was primarily attributable to the decrease in loan portfolio. On the other hand, interest income from investment securities increased by 28.82 percent from P9.037 million to P11.641 million. This year’s total interest expense, consisting mainly of interest expense from deposit liabilities, was booked at P17.038 million, down by 11.63 percent relative to lower high cost deposits. Our operating costs increased by 10.38 percent from P45.747 million in 2013 to P50.496 this past year, impelled by the increase in compensation and employee benefits granted which took effect in 2014 and additional employees hired during the year.
At year’s end, our total capital funds or total net worth realized was P243.164 million up by 11.35 percent compared to last year’s balance of P218.387 million.
This has, without a doubt, been a very challenging year for us. We continue to look ahead, however. In defining our course over the next three to five years to improve our earnings, strategic plans have been discussed with the Board in the last two Board meetings. These plans include an establishment of an Ormoc City, Leyte branch where the Bank has connections in the sugar industry; a branch in Kabangkalan to expand our reach with the Occidental sugar planters and other businesses that might be generated after the merging of both provinces (Oriental and Occidental Negros) has been approved; converting our associate Rural Bank of Sibulan into another branch as a pilot for micro-financing; more off-site ATM units in strategic locations; strategically placed booking units in Bukidnon, Ormoc, Leyte and the Kabangkalan-Mabinay area for loan application processing; application for a foreign exchange license with BSP upon accomplishing the build-up of capital estimated by 2019, and; looking into short term investments in readily marketable securities or commercial papers.
We have accomplished much in weathering the year’s challenges. With the aforementioned plans, and coupled with our commitment, we will continue to lengthen our strides forward.