Security Bank Corporation (PSE:SECB) held its stockholders” meeting last May 25, 2004 and re-elected the following to the Board of Directors: Frederick Y. Dy as Chairman, Paul Y. Ung as Vice Chairman, and Philip T. Ang, Efren P. Aranzamendez, Anastasia Y. Dy, Jose R. Facundo, James JK Hung, Jose Perpetuo M. Lotilla, Eduardo I. Plana, Rafael F. Simpao, Jr. and Alberto S. Villarosa.

In his report to the shareholders, Security Bank President and Chief Executive Officer Alberto S. Villarosa reported a 25% improvement in 2003 net income to P631 million from the 2002 level of P 502 million. He attributed the Bank”s strong income performance to the growth in the Bank”s consumer, corporate and investment banking businesses, further gains in operational efficiency, and improving risk profiles. With the Bank”s strong income performance in 2003 continuing over 2004, the Bangko Sentral ng Pilipinas confirmed the Board”s approval of a cash dividend of P.20 per share to shareholders on record as of May 31 for payment on June 24.

Villarosa further disclosed that the Bank realized P 278 million in net income for the 1st 4 months of the year, resulting to a continued improvement in the annualized return on equity to 8.1% from the 6.4% earned in 2003. Villarosa noted that the Bank is ahead of its 2004 income targets. He expressed confidence in sustaining the momentum of income growth with the support of his seasoned senior management team, the Bank”s access to lower cost funds, its highly efficient operations which have resulted to a further improvement in cost to income ratio of 52%, its strong capitalization and superior asset quality indices.

The Bank”s April year-to-date interest differential income increased by 49% from the income it earned for the same period in 2003. Villarosa attributed the strong showing to successful efforts to generate business volumes and better spreads, as well as significant collections on non-performing loans. The growth in net margins was more than enough to cover for the decline in securities trading gains from the record highs realized during the same period in 2003. With the increase in the yield curves for both the peso and dollar interest rates, market conditions were not favorable for the realization of securities trading this year. The favorable interest differential income performance likewise allowed the Bank to aggressively dispose of its ROPOA during the period via an auction sale held in February.

The efforts to quickly dispose of its ROPOA are part of the Bank”s balance sheet clean-up efforts. While the volume of non-performing loans has been kept under control with its non-performing loans ratio of 8.4% being one of the lowest in the industry, the Bank has continued its prudent stance of aggressively setting aside provisions for cover for its non-performing assets. Provisions set aside for the 4 months of 2004 amount to P316 million and exceed the P289 million in provisions set aside for the same period in 2003. NPL cover remains at a strong 59%.

Villarosa explained that the Board of Security Bank approved in 2003 the Bank”s five-point growth strategy embodied in a three-year plan covering the years 2004 to 2006. The plan calls for the build-up of the Bank”s consumer banking business, the pursuit of total corporate banking relationship building efforts, the optimized use of available channels for distribution of the Bank”s products and services and the institutionalization of product development efforts. He noted that the Bank”s consumer and corporate banking businesses are tracking the 3-year plan with the launch of new initiatives and products geared towards growth in low cost deposits. Security Bank”s credit cards, the Diners Club International and the Security Bank Mastercard, enjoy one of the highest usage in the industry with an average spend which is 3 times that of the industry average. SB Equities, the Bank”s stockbrokerage house, is a leading local player ranked 8 th in terms of volume traded among the 134 active brokerage houses, and 2nd among the bank-owned units in the year 2003.