The “New” Producers Savings Bank Corporation
The Securities and Exchange Commission (“SEC”) issued on October 01, 2012, the Certificate of Incorporation of Producers Savings Bank Corporation and the Certificate of Filing of the Articles and Plan of Consolidation by and between (the ‘old’) Producers Savings Bank Corporation and New Rural Bank of Victorias, Inc. to be known as “Producers Savings Bank Corporation”.
Pursuant to RA 7906 and the Monetary Board Resolution No. 963 dated June 15, 2012, the Bangko Sentral ng Pilipinas (“BSP”) issued (the ‘new’) Producers Savings Bank Corporation’s Certificate of Authority to Operate as a Thrift Bank on October 08, 2012.
(The ‘new’) Producers Savings Bank Corporation (“Producers Bank” or the “Bank”) commenced operations as a consolidated bank on October 12, 2012.
On October 22, 2012, the BSP issued Circular Letter No. CL-2012-074 addressed to all banks and non-bank financial institutions advising the said entities that the SEC approved on October 01, 2012 the Plan of Consolidation and the Agreement and Articles of Consolidation of Producers Savings Bank Corporation and New Rural Bank of Victorias, inc. to be known as “Producers Savings Bank Corporation”, and that the consolidated bank started to operate as such on October 12, 2012.
The Monetary Board in its Resolution No. 1700 dated October 11, 2012, classified Producers Bank as a “complex bank” for purposes of complying with the requirements of BSP Circular Nos. 747 and 749 after considering the following:
1. Wide geographical reach;
2. Distinct financial products and services offered; and
3. High growth and aggressive business model.
As of April 15, 2013, Producers Bank has 84 operating branches in Luzon and in the Visayas with 19 approved but unopened branches.
Producers Bank has a thrift bank subsidiary, Iloilo City Development Bank (“ICDB”), operating in the island of Panay with 8 operating branches and 5 approved but unopened branches.
The respective board of directors and stockholders of Producers Bank and ICDBank have approved the merger of the two (2) banks with Producers Bank as the surviving entity.
On January 8, 2013, Producers Bank and ICDBank formally submitted their request for consent by the Philippine Deposit Insurance Corporation (“PDIC”), and request for approval by the BSP, on the merger of the two (2) banks with Producers Bank as the surviving thrift banking entity.
Brief History of the ‘OLD’ Producers Savings Bank Corporation
Producers Rural Banking Corporation (“Producers Bank” or the “Bank”), formerly known as Producers Rural Bank of San Jose City (N. E.), Inc., was registered with the Securities and Exchange Commission (“SEC”) on 23 |October 1995 to operate as a rural banking corporation.
On 2 August 1995, the Monetary Board in its Resolution No. 856 approved the grant of an authority to Producers Bank to operate as a rural bank pursuant to Republic Act 7353.
On 17 November 1995, the Bangko Sentral ng Pilipinas (“BSP”) granted the Bank its Certificate of Authority to operate as a rural bank.
And on 27 November 1995, Producers bank started its operation as a rural bank.
Rural Bank with Largest Branch Network in Luzon and Second (2nd) Largest Nationwide
As a rural bank, Producers Bank has preserved the distinction of having the largest branch network in Luzon and the second largest branch network nationwide among rural bank
Third (3rd) Largest Rural Bank in Terms of Total Resources as of End-2009
As a rural bank, based on data obtained from BSP, Producers Bank ranked third (3rd) largest among the rural banks in the Philippines in terms of total assets as of end of 2009.
Auhority to Accept or Create Demand Deposit
On 18 February 1994, the Monetary Board in its Resolution No. 157 approved the creation or acceptance by the Bank of demand deposits.
On 11 April 1997, the BSP issued the Certificate of Authority to the Bank to accept or create demand deposit.
Acquisition and Subsequent Merger with Rural Bank of Rosales, Inc. (“Rosbank”)
On 18 September 2003, the BSP approved the merger between the Bank and the Rural Bank of Rosales, Inc. (“Rosbank”), a rural bank with 11 branches, and owned by the Estrella family of Pangasinan. The Articles of Merger and the Plan of Merger were approved by the Securities and Exchange Commission on 19 July 2004 and the BSP approved the operation of the 2 banks as a merged bank, with Producers Bank as the surviving entity, on 20 December 2004.
In addition to the 11 branches of Rosbank, the BSP gave Producers Bank the authority to open 9 more new branches.
Bank’s Head Office Transferred to the National Capital Region
On 18 September 2003, the Monetary Board in its Resolution No. 1362 approved the transfer of the head office of Producers Bank from Maharlika Highway, Sangitan East, Cabanatuan City, Nueva Ecija to the 17th floor One San Miguel Avenue (OSMA), Shaw Boulevard corner San Miguel Avenue, Ortigas Center, Pasig City. On 25 May 2005, the BSP noted the transfer of the head office of Producers Bank effective 3 May 2005.
Authority to Operate a Foreign Currency Deposit Unit (“FCDU”)
The Monetary Board, in its Resolution No. 960 dated 30 August 2007, approved Producers Bank’s application to operate a Foreign Currency Deposit Unit (“FCDU”).
The Certificate of Authority to operate an FCDU dated 23 April 2008 was obtained by the Bank on 8 May 2008. The certificate was issued by the BSP by authority of the Monetary Board and under the Republic Act No. 8791 (The General Banking Law of 2000) and the Manual of Regulations for Banks (“MORB”).
The authority would allow Producers bank to accept foreign currencies as deposits, grant foreign currency-denominated loans to borrowers with a natural foreign exchange hedge and to invest in foreign currency-denominated financial instruments such as dollar TDs of other banks and ROP bonds.
Acquisition of a Significant Stake in Iloilo City Development Bank (“ICDBank”)
In December 2008, Producers Bank acquired a significant stake in Iloilo City Development Bank (“ICDBank”), a 46-year old thrift bank based in Iloilo City with three (3) banking offices, in order to gain a foothold in the lucrative Visayas market.
On 6 March 2009, the Monetary Board in its Resolution No. 373 approved the request of Producers bank to invest up to 49% in the issued and outstanding common shares of Iloilo City Development Bank (“ICDB”).
On 17 June 2009, the BSP approved the transfer of purchased ICDB shares to Producers Bank and approved the interlocking directorships of Messrs. Andres M. Cornejo, Edmundo C. Medrano and Alejandrino J. Ferreria and Atty. Arthur R. Ponsaran as Corporate Secretary.
Upgrading of Banking License from Rural Bank into a Thrift Bank
On 13 August 2009, the Monetary Board, in its Resolution No. 1158, approved the application of Producers Bank to convert/upgrade its license from a rural bank into a thrift bank, inspite of an existing moratorium on the issuance of new banking licenses which was in effect since 1999.
On 6 June 2010, the BSP approved the amendments to the Bank’s Articles of Incorporation and By-Laws and issued its Certificate of Authority to enable the Bank to register the same with the SEC. The amendments cover the change in name (to Producers Savings Bank Corporation) and its primary purpose (from rural banking to thrift banking).
Acquisition of 100% of the Voting Stocks of the New Rural Bank of Victorias, Inc. (“Bank Victorias”) for the Purpose of Consolidation of Producers Bank and Bank Victorias into a New Banking Entity
- On September 29, 2010, Producers bank acquired One Hundred Percent (100%) ownership stake in the New Rural Bank of Victorias, Inc. (“Bank Victorias”), the largest rural bank in the island of Negros with six (6) banking offices.
- The Monetary Board in its Resolution No. 727 dated May 12, 2011, approved the following, among others, relative to Producers Bank’s various requests:
1. Acquisition by Producers Bank of the 100% shares of stock of Bank Victorias;
2. Insourcing by Producers Bank of the compliance and internal audit functions of
3. Noted the take over on September 29, 2010 by Producers Bank of the
management of Bank Victorias.
The above mentioned approval by the Monetary Board officially made Bank
Victorias a wholly owned subsidiary of Producers Bank even if on temporary
basis prior to consolidation.
- In a letter to Producers Bank dated June 6, 2011, the BSP conveyed its approval of the interlocking directorships/officerships of several key directors and senior officers of Producers Bank in Bank Victorias and in ICDBank.
- On April 25, 2012, the PDIC Board, per Resolution No. 2012-04-083, granted its consent to the proposed consolidation of Producers Bank and Bank Victorias to be known as “Producers Savings Bank Corporation” pursuant to Sec. 21.c of the PDIC Charter.
- The Monetary Board (“MB”) in its Resolution No. 963 dated June 15, 2012, approved the consolidation of Producers Savings Bank Corporation and the New Rural Bank of Victorias, Inc. into a new consolidated thrift bank to be known as “Producers Savings Bank Corporation”. The MB approval also included a grant of a number of meaningful consolidation incentives of the consolidated bank.
Issuance of Unsecured Subordinated Debt Qualifying as Lower Tier 2 Capital
The Monetary Board under MB Resolution No. 1244 dated October 30, 2007 approved the issuance by Producers Rural Banking Corporation of a P120.0 Million, peso-denominated, 10 -year Unsecured Subordinated Debt (“UnSD”) qualifying as Lower Tier 2 capital, to be issued by way private placement for Land Bank of the Philippines (“LANDBANK”).
On December 20, 2007, Producers Bank issued P120.0 Million, 10-year UnSD qualifying as Lower Tier 2 Capital to Land Bank on a private and negotiated basis.
With this issuance, Producers bank achieved several firsts namely:
- Producers Bank became the first bank to have issued Unsecured Subordinated Debt on a private and negotiated basis (prior to the issuance by Producers Bank, all UNSD issuances have been underwritten and were public issuances);
- Producers Bank became the first rural bank to issue Unsecured Subordinated Debt; and
- The P120.0 Million UnSD issuance by Producers Bank is the largest UnSD issuance to date by a rural bank.
The Monetary Board, in its Resolution No. 159 dated January 25, 2013, approved Producers Bank’s request to exercise its call option on its existing P120.0 Million UnSD.
After having obtained Monetary Board approval for Producers Bank to exercise its call option on its existing P120.0 Million UnSD issued to Land bank, the Bank effected the prepayment of its P120.0 Million UNSD on February 11, 2013.
In a letter dated January 04, 2013, Land Bank informed Producers Bank that it has approved a P450.0 Million UnSD for up to 10 years at an interest rate of prevailing 10-year PDSTF at the time of drawdown plus a spread of 2% or 7% whichever is higher, with no step ups in the interest rate after 5 years.
Direct participation in the Clearing Operations of the PCHC and BSP
- The Monetary Board in its Resolution No. 698 dated May 20, 2010 approved the application of Producers Bank:
- To directly participate in the clearing operations of the Philippine Clearing House Corporation (“PCHC”) and BSP and;
- For an Overnight Clearing Line with the department of Loans and Credit (of the BSP) collateralized by government securities (Retail Treasury Bonds) with a face value of P110.0 Million.
- On July 26, 2010, the application by Producers Bank for associate membership was approved by PCHC.
- On June 01, 2011, Producers Bank commenced its direct participation in the check clearing operations and processes of the PCHC.
Grant of Clean Overdraft Clearing Line and Approval to Withdraw Retail Treasury Bonds Securing the Bank’s Overnight Clearing Line
Following the approval by the BSP of a Rediscounting Line in the amount of P1.391 Billion equivalent to 150% of the adjusted net worth of the newly consolidated thrift bank as of October 31, 2012, the BSP approved the grant in favor of Producers Bank of a Clean Overdraft Credit Line (“Clean OCL”) in the amount of P208.650 Million representing 15% of the the approved Rediscounting Line.
The Clean OCL shall be available for a period of one year to expire on October 12, 2013.
Participation in the PhilPASS
- In a letter dated February 14, 2011, the BSP conveyed its approval of the bank’s application for participation in the Philippine Payments and Settlements System (“PhilPASS”).
- In March 2011, Producers Bank commenced participation in, and started to make use of the facilities of PhilPASS.
Grant of Authority to Solicit and Accept Deposits Outside Bank Premises
On April 04, 2011, the BSP granted authority to Producers Bank to solicit and service deposits outside the bank premises of its Head Office and fifty nine (59) operating branches at that time.
On June 07, 2012, the BSP granted authority to eight (8) of Producers Bank’s operatings branches to solicit and service deposits outside their bank premises.
Grant of Authority to Accept government Deposits in Certain Municipalities
- The Monetary Board, in its Resolution No. 699 dated June 21, 2007, renewed the Bank’s authority to accept government deposits in municipalities where there are no government banks, namely: (i) Rizal, (ii) Lannera, (iii) Lupao and (iv) Carranglan.
- The Monetary Board, in its Resolution No. 1193 dated September 11, 2008 approved Producers Bank’s application for authority to accept government deposits from the following municipalities on a continuing basis, namely: () Bongabon, Nueva Ecija, (ii) Binalonan, Pangasinan, (iii) Rosales, Pangasinan and (iv) San Mateo, Isabela.
- The Monetary Board, in its Resolution No. 576 dated April 14, 2011 approved Producers Bank’s application for authority to accept government deposits from the Municipality of Managatarem, Pangasinan.
- On August 01, 2012, the BSP approved the Bank’s Cabiao Branch to accept government deposits from Cabiao Water District.
- The Monetary Board, in its Resolution No. 1653 dated October 04, 2012 approved Producers Bank’s application for authority to accept government deposits from the following Municipalities: (i) Cabiao, Nueva Ecija and (ii) San Ildefonso, Bulacan.
- The Monetary Board, in its Resolution No. 276 dated February 14, 2013, approved Producers Bank’s application for authority to accept government deposits from the the Municipality of Marilao, Bulacan on a continuing basis.