1. Surviving Microfinance in These Trying Times 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila Atty. Nicolas J. Lim President/CEO,1 st Valley Bank, Inc.

2. 1 st Valley Bank, Inc. Established in 1956 Formerly known as Rural Bank of Kapatagan Valley, Inc. (RUBANKA) The biggest in Northwestern Mindanao. Rated A+(rb) by the PhilRatings system. Hall of Fame Awardee, Most Outstanding RB, National Level by Land Bank of the Philippines 80% of the branches are in the rural areas.

3. 1 st Valley Bank, Inc. Branch Offices

4. 1 st Valley Bank, Inc. MF Programs with MABS FAME (Financial Assistance to Micro- Entrepreneurs)  Introduced in July 1999 MAP (Micro-Agri Loan Product)  Started in 2004. Mobile banking technology- sinceJuly 2006  (TextAPayment; TextADeposit; TextASalary)

5. 1 st Valley Bank, Inc. Microfinance Operations (as of Dec 2008) No. of Branches 19 No. of Account Specialists 26 No. of Borrowers 4,387 Loan Portfolio Balance P47.74 M Cum. No. of Clients Served 10,920 Cum. No. Loans Disbursed since 1999 49,676 Cum. Amount of Loans Disbursed P782.78 M No. of micro-deposit accounts 89,109 Total amount of micro-deposits P105.69M Portfolio-at-Risk Rate, 30 days (PARR 30 ) 2.75%

6. 1 st Valley Bank, Inc. Selected Bankwide Indicators Performance Data 1999 (start of MF Operations) Dec.08 Net Change 1999 to Dec2008 Branch offices 619 183% No. of employees 79327 314% Total Resources P251.17 MP2.68B 1066% Total Loans P217.02 MP2.16B 895% Total Deposits P88.42 MP1.56B 1664% Total Capital P46.99 M P354.97 M 655% Net Income, after Tax P6.51 MP 64.73 M 894%

7. 1 st Valley Bank, Inc. External Challenges to our Operations

8. 1 st Valley Bank, Inc. Legacy Issue:

9. 1 st Valley Bank, Inc. Global Financial Crisis:

10. 1 st Valley Bank, Inc. 1VB STRATEGIES Robust Organizational Structure Generalist vs Specialist Increase the number of training focusing on Operational Efficiency Realign Targets

11. 1 st Valley Bank, Inc. Other Initiatives Review Priority Programs Regularly Monitor Controllable Expenses Intensify recovery of foreclosed assets and other collectibles Widen sourcing of credit lines Prepare Notes for Rediscounting And Training…Training… Training… and a lot more to be done

12. 1 st Valley Bank, Inc. It’s Time to Go Back to Basics: Zero Tolerance to delinquency Start small loans, step up Shorter terms for fast recovery of funds Small frequent amortization payments Focus on character and cash flow rather than collateral Strict adherence to policies and standards Take care of your staff, they are your business centers

13. 1 st Valley Bank, Inc. Microfinance Best Practices is still the best weapon we have. Stick to them