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FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

(Mark One)


[X]	Quarterly report pursuant to under Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended ~~June~~September 30, 2001.


[ ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from ~~______________~~ to ~~______________~~

Commission File Number: 333-43021

VIB Corp

(Exact name of registrant as specified in its charter)

California (State or Other Jurisdiction of Incorporation or Organization) 33-0780371 (IRS Employer Identification No.)


California		33-0780371

(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

1498 Main Street, El Centro, California 92243

(Address of Principal Executive Offices)

(760) 337-3200

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, itif changed since Last Report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 12,~~624~~656,~~349~~ 168 shares as of ~~August~~ October 226, 2001.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
PART 1 FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		Consolidated Statements of Financial Condition
		Consolidated Statements of Income
		Consolidated Statement of Stockholders’ Equity
		Consolidated Statements of Cash Flows
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT 3.1

~~Table~~PART of1 FINANCIAL ~~Contents~~INFORMATION

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The following Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Cash Flows, and Consolidated Statement of Stockholders’ Equity for the period ended ~~June~~September 30, 2001 have been prepared by by VIB Corp (the “Company”) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial condition at or for the period ended ~~June~~September 30, 2001 have been made. The results of operations for the period ended ~~June~~September 30, 2001 are ~~not~~ not necessarily indicative of the results that may be expected for the full year.

VIB CORP AND SUBSIDIARIES Consolidated Statements of Financial Condition ~~June~~September 30, 2001 and December 31, 2000 (Unaudited)

			June 30			December 31
			September 30			December 31
			2001			2000
ASSETS
Cash and due from banks			$	5040,~~590~~249,~~555~~566		$	51,604,079
Federal funds sold				—1,500,000			—
		Total cash and cash equivalents		5041,~~590~~749,~~555~~566			51,604,079
Interest bearing deposits				~~146~~305,~~635~~283			1,447,888
Investment Securities: (note B)
	Securities available for sale			~~127~~212,~~828~~917,~~089~~195			189,876,563
	Securities held to maturity			—			2,440,928
		Total investment securities		~~127~~212,~~828~~917,~~089~~195			192,317,491
Federal Home Loan and Federal Reserve Bank stock, at cost				59,~~922~~703,~~891~~950			9,185,249
Loans: (note C) Commercial				86,649,967			139,020,547
Loans: (note C)
	Agricultural			56,655,394			70,217,153
	Commercial			83,926,375			139,020,547
	Real estate — construction			146,197,735			129,170,418
	Agricultural			51,315,311			70,217,153
	Real estate — other			509,147,224			453,041,114
	Real estate-construction			178,821,874			129,170,418
	Consumer			35,768,727			36,280,567
	Real estate-other			502,203,251			453,041,114
		Total Loans		834,419,047			827,729,799
	Consumer			33,997,597			36,280,567
Net deferred loan fees				(3,988,297	)		(4,007,270	)
		Total Loans		850,264,408			827,729,799
Allowance for credit losses				(9,494,017	)		(8,297,814	)
Net deferred loan fees				(4,550,672	)		(4,007,270	)
		Net Loans		820,936,733			815,424,715
Allowance for credit losses				(9,873,321	)		(8,297,814	)
Premises and equipment				13,472,723			13,863,823
		Net Loans		835,840,415			815,424,715
Other real estate owned				2,295,568			1,359,905
Premises and equipment				12,660,268			13,863,823
Cash surrender life insurance				20,675,523			19,990,350
Other real estate owned				2,651,988			1,359,905
Deferred tax asset				6,358,030			6,923,000
Cash surrender life insurance				21,022,038			19,990,350
Intangible assets				17,792,654			18,435,865
Investment in unconsolidated subsidiary				2,000,000			—
Accrued interest and other assets				11,538,424			12,375,595
Deferred tax asset				5,453,496			6,923,000
TOTAL ASSETS			$	1,077,557,825		$	1,142,927,960
Intangible assets				17,471,049			18,435,865
Accrued interest and other assets				12,054,746			12,375,595
TOTAL ASSETS			$	1,173,829,994		$	1,142,927,960

The accompanying notes are an integral part of the consolidated financial statements.

VIB CORP AND SUBSIDIARIES Consolidated Statements of Financial Condition ~~June~~September 30, 2001 and December 31, 2000 (Unaudited)

			June 30			December 31
			September 30			December 31
			2001			2000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
	Noninterest-bearing demand		$	~~221~~218,~~079~~921,~~937~~040		$	211,541,381
	Money Market and NOW			~~193~~202,~~222~~044,~~941~~271			208,177,709
	Savings			65,~~041~~452,~~148~~851			62,657,235
	Time deposits under $100,000			~~219,~~200,~~799~~852,045			220,547,372
	Time deposits $100,000 and over			~~196~~203,~~851~~999,~~121~~466			207,314,327
		Total Deposits		~~895~~891,~~395~~269,~~946~~673			910,238,024
Fed funds purchased				—			750,000
Federal Home Loan Bank advances				63158,~~000~~350,000			118,200,000
Capital lease obligations				2,~~968~~972,~~706~~770			2,954,995
Company-obligated mandatorily redeemable Capital Securities of subsidiary trusts holding solely Subordinated Debentures of the Company				32,400,000			32,400,000
Accrued interest and other liabilities				78,~~614~~838,~~080~~118			7,534,152
		Total Liabilities		1,~~001~~093,~~378~~830,~~732~~561			1,072,077,171
Stockholders’ Equity:
	Preferred shares, no par value; 10,000,000 shares authorized; issued 0 shares in 2001 and 2000			—			—
	Common shares, no par value, Authorized 25,000,000 in 2001 and 2000, Outstanding: 12,612,479 in 2001 and 12,541,286 in 2000			65,639,778			62,283,298
	Common shares, no par value, authorized 25,000,000 in 2001 and 2000, Outstanding: 12,651,491 in 2001 and 12,542,553 in 2000			65,921,547			62,283,298
	Undivided Profits			1012,~~553~~790,~~789~~714			9,173,494
	Accumulated other comprehensive income, net of tax of $(10,059) in 2001 and $(421,122) in 2000			(14,474	)		(606,003	)
	Accumulated other comprehensive income, net of tax of $894,476 in 2001 and $(421,122) in 2000			1,287,172			(606,003	)
		Total Stockholders’ Equity		7679,~~179~~999,~~093~~433			70,850,789
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	1,~~077~~173,~~557~~829,~~825~~994		$	1,142,927,960

The accompanying notes are an integral part of the consolidated financial statements.

VIB CORP AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)

For the Three Month

For the ~~Six~~Nine Month

Periods Ended

June 30,

September 30,

2001

2000

2001

2000

Interest Income:

Interest and Fees on Loans

1918,~~109~~039,~~456~~799

1819,~~332~~524,~~905~~995

3856,~~736~~776,~~513~~312

3555,~~738~~263,~~375~~370

Interest on Investment Securities — Taxable

1,441,601

2,302,771

3,575,794

4,551,705

Interest on Investment Securities-Taxable

1,840,170

2,330,799

5,415,964

6,882,504

Interest on Investment Securities — Nontaxable

540,904

682,442

1,230,327

1,363,981

Interest on Investment Securities-Nontaxable

423,198

723,593

1,653,525

2,087,574

Other Interest Income

~~143~~13,~~422~~198

1917,~~050~~406

~~176~~190,~~878~~076

6582,~~213~~619

Total Interest Income

2120,~~235~~316,~~383~~365

2122,~~337~~596,~~168~~793

4364,~~719~~035,~~512~~877

4164,~~719~~316,~~274~~067

Interest Expense:

Interest on Money Market and NOW

1,~~123~~019,~~484~~600

1,~~279~~465,~~460~~213

23,~~697~~716,~~324~~924

23,~~442~~907,~~733~~946

Interest on Savings Deposits

~~196~~175,~~793~~787

~~296~~276,~~001~~138

~~434~~610,~~538~~325

~~604~~880,~~418~~556

Interest on Time Deposits

54,~~956~~931,~~405~~592

56,~~828~~395,~~411~~576

1217,~~482~~414,~~590~~182

1017,~~962~~357,~~387~~963

Interest on Other Borrowings

12,~~735~~021,~~687~~757

2,~~702~~759,~~792~~641

46,~~090~~112,~~972~~729

57,~~171~~931,~~911~~552

Total Interest Expense

98,~~012~~148,~~369~~736

10,~~106~~896,~~664~~568

1927,~~705~~854,~~424~~160

1930,~~181~~078,~~449~~017

Net Interest Income

12,~~223~~167,~~014~~629

11,~~230~~700,~~504~~225

2436,~~014~~181,~~088~~717

2234,~~537~~238,~~825~~050

Provision for Credit Losses

750,000

~~700~~675,000

12,~~500~~250,000

12,~~550~~225,000

Net Interest Income after Provision for Credit Losses

11,~~473~~417,~~014~~629

1011,~~530~~025,~~504~~225

2233,~~514~~931,~~088~~717

2032,~~987~~013,~~825~~050

Non-interest Income:

Service Charges and Fees

12,~~768~~063,~~432~~053

1,~~679~~619,~~246~~912

35,~~334~~397,~~759~~812

34,~~193~~813,~~156~~068

Gain on Sale of Loans and Servicing Fees

~~275~~160,~~479~~192

~~341~~373,~~674~~651

~~585~~745,~~438~~630

~~623~~996,~~343~~994

Gain on Sale of Securities

~~641~~1,~~783~~539

—

1,~~472~~474,~~678~~217

—

Other Income

~~409~~422,~~646~~552

~~447~~303,~~815~~493

~~689~~1,~~825~~112,377

~~666~~969,~~049~~542

Total Non-interest Income

32,~~095~~647,~~340~~336

2,~~468~~297,~~735~~056

68,~~082~~730,~~700~~036

46,~~482~~779,~~548~~604

Non-interest Expense:

Salaries and Employee Benefits

5,~~551~~041,~~603~~007

54,~~076~~805,~~600~~096

1015,~~948~~989,~~991~~998

1014,~~060~~865,~~664~~760

Occupancy Expenses

~~876~~930,~~343~~923

~~767~~859,~~770~~277

12,~~739~~670,~~617~~540

12,~~501~~360,~~410~~687

Furniture and Equipment

~~910~~965,~~225~~879

~~773~~764,~~556~~838

12,~~756~~722,~~519~~398

12,~~508~~273,~~651~~489

Other Expenses (note D)

3,~~638~~739,~~962~~231

3,~~439~~468,~~974~~352

711,~~343~~082,~~502~~733

610,~~746~~215,~~750~~102

Total Non-interest Expense

10,977,133

10,057,900

21,788,629

19,817,475

Total Non-Interest Expense

10,677,040

9,897,563

32,465,669

29,715,038

Income Before Income Taxes

3,~~591~~387,~~221~~925

23,~~941~~424,~~339~~718

610,~~808~~196,~~159~~084

59,~~652~~077,~~898~~616

Income Taxes

1,~~291~~151,000

~~962~~1,~~925~~161,513

23,~~403~~554,300

12,~~834~~995,~~250~~763

Net Income

2,~~300~~236,~~221~~925

12,~~978~~263,~~414~~205

46,~~404~~641,~~859~~784

36,~~818~~081,~~648~~853

Per Share Data: (note E)

Net Income — Basic

0.18

0.1618

0.3553

0.3049

Net Income — Diluted

0.18

0.1618

0.3552

0.3048

The accompanying notes are an integral part of the consolidated financial statements.

~~VIBCORP~~VIB CORP AND SUBSIDIARIES Consolidated Statement of Stockholders’ Equity

				~~Common Shares~~	Common Shares									~~Accumulated~~	Accumulated
														~~Other~~	Other
				~~Number of~~	Number of					~~Undivided~~	Undivided			~~Comprehensive~~	Comprehensive
				~~Shares~~	Shares		~~Amount~~	Amount		~~Profits~~	Profits			~~Income~~	Income			~~Total~~	Total
Balance January 1,2000					11,443,037		$	57,449,500		$	5,252,469			$	(4,456,609	)		$	58,245,360
Balance January 1, 2000						11,443,037		$	57,449,500		$	5,252,469			$	(4,456,609	)		$	58,245,360
Comprehensive Income
	Net income										~~8,620,407~~	8,620,407							~~8,620,407~~	8,620,407
	Other comprehensive income
		Unrealized gain on securities, net of taxes of $2,681,226													~~3,850,606~~	3,850,606			~~3,850,606~~	3,850,606
Total Comprehensive income																			~~12,471,013~~	12,471,013
Cash dividends (fractional shares)											~~(15,784~~	)(15,784	)						~~(15,784~~	)(15,784	)
Stock dividend					~~696,289~~	696,289		~~4,683,598~~	4,683,598		~~(4,683,598~~	)(4,683,598	)						—	—
Exercise of stock options					~~29,318~~	29,318		~~150,200~~	150,200										~~150,200~~	150,200
Balance at December 31, 2000					~~12,168,644~~	12,168,644		~~62,283,298~~	62,283,298		~~9,173,494~~	9,173,494			~~(606,003~~	)(606,003	)		~~70,850,789~~	70,850,789
Comprehensive Income
	Net income										~~4,404,859~~	6,641,784							~~4,404,859~~	6,641,784
	Other comprehensive income
		Unrealized gains on securities, net of taxes of $1,014,660													1,460,409				1,460,409
		Unrealized gains on securities, net of taxes of $1,920,025														2,762,963				2,762,963
		Less reclassification adjustments for gains included in net income, net of taxes of $603,798													(868,880	)			(868,880	)
			Less reclassification adjustments for gains included in net income, net of taxes of $604,429													(869,788	)			(869,788	)
	Total Other comprehensive income																		~~591,529~~	1,893,175
Total Comprehensive income																			~~4,996,388~~	8,534,959
Cash dividends (fractional shares)											~~(10,693~~	)(10,693	)						~~(10,693~~	)(10,693	)
Stock dividend					~~365,761~~	365,761		~~3,013,871~~	3,013,871		~~(3,013,871~~	)(3,013,871	)						—	—
Exercise of stock options					~~78,074~~	117,086		~~342,609~~	624,378										~~342,609~~	624,378
Balance at June 30, 2001					12,612,479		$	65,639,778		$	10,553,789			$	(14,474	)		$	76,179,093
Balance at September 30, 2001						12,651,491		$	65,921,547		$	12,790,714			$	1,287,172			$	79,999,433

The accompanying notes are an integral part of the consolidated financial statements.

~~VIBCORP~~VIB CORP AND SUBSIDIARIES Consolidated ~~Statements~~Statement of Cash Flows (Unaudited)

					For the Six-Month
					For the Nine-Month
					Periods Ended
					June 30,
					September 30,
					2001			2000
Cash flow from operating activities:
Net income					$	46,~~404~~641,~~859~~784		$	36,~~818~~081,~~648~~853
Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				23,~~074~~192,~~176~~526			12,~~781~~877,~~386~~805
		Deferred income taxes				(279,390	)		~~216~~(802,~~711~~696	)
		Provision for credit losses				12,~~500~~250,000			12,~~550~~225,000
		Originations of loans held for sale				(3133,~~691~~838,~~990~~124	)		(1625,~~291~~599,~~066~~051	)
		Proceeds from sale of loans				3033,~~516~~852,~~917~~399			2032,~~213~~130,~~062~~639
		Net gain on loan sales				(~~402~~477,~~266~~858	)		(~~385~~1,~~898~~066,885	)
		Loss on sale of other real estate owned				53,785			(73,338	)
		Loss/(Gain) on sale of other real estate owned				54,574			(73,338	)
		Net increase in cash surrender value of life insurance				(~~685~~1,~~173~~031,688	)		(~~540~~830,~~267~~115	)
		Net realized gains in available for sale securities				(1,~~472~~474,~~678~~217	)		—
		Net amortization of premium/discount on available for sale securities				51301,~~718~~409			17(81,~~882~~411	)
		Net change in accrued interest, other assets, and other liabilities				158,~~350,397~~114			(12,~~114~~130,~~521~~591	)
				Net cash provided by operating activities		59,~~420~~249,~~355~~529			912,~~192~~731,~~599~~210
		Cash flow from investing activities:
			Purchases of investment securities			(65159,~~630~~995,~~264~~122	)		(912,~~569~~430,~~724~~113	)
			Net cash used for purchase of King’s River State Bank			—			(15,596,765	)
			Net cash paid for the purchase of life insurance			—			(1,800,000	)
			Proceeds from sales of other real estate owned			2,~~167~~317,995			1,472,593
			Proceeds from sales of investment securities			5051,~~966~~002,~~251~~296			—
			Proceeds from maturities of investment securities			8492,~~839~~256,~~324~~000			1014,~~655~~594,~~693~~275
			Loans granted net of repayments			(825,~~592~~866,~~122~~769	)		(6294,~~333~~591,~~702~~003	)
			Premises and equipment expenditures			(1,~~039~~024,~~865~~155	)		(12,~~489~~210,~~500~~869	)
			Net (increase)/decrease in interest bearing deposits			1,~~301~~142,~~253~~605			(~~294~~561,~~773~~953	)
				Net cash (used)/provided by investing activities		64(40,~~012~~167,~~572~~150	)		(78111,~~956~~123,~~178~~835	)
		Cash flow from financing activities:
			Net increase/(decrease) in demand deposits and savings			(3,032,299	)		16,594,716
			Net increase in demand deposits and savings			4,041,836			16,087,619
			Net increase/(decrease) in time deposits			(1123,~~809~~010,~~779~~188	)		7755,~~061~~750,~~324~~067
			Net change in capitalized lease obligations			1317,~~711~~775			1724,~~825~~152
			Net change in fed funds purchased			~~(55~~40,~~200~~150,000	)		(1514,~~550~~050,000	)
			Net change in other borrowings			(750,000	)		(525,~~850~~600,000	)
			Proceeds from Capital Securities			—			—10,000,000
			Payments for dividends			(10,693	)		(6,868	)
			Proceeds from exercise of stock options and warrants			~~342~~624,~~609~~378			150,201
				Net cash (used)/provided by financing activities		~~(70~~21,~~446~~063,~~451~~108	)		7293,~~417~~555,~~198~~171
				Net change in cash and cash equivalents		$(1$9,~~013~~854,~~524~~513	)	$	2($4,~~653~~837,~~619~~454	)
	Cash and cash equivalents:
				Beginning of period	$	51,604,079		$	45,758,670
				End of period	$	5041,~~590~~749,~~555~~566		$	4840,~~412~~921,~~289~~216
		Supplemental disclosure of cash flow information:
				(in Thousands)
		Cash paid for interest expense			$	1927,~~532~~705		$	1829,~~281~~733
		Cash paid (received) for income taxes			$	13,~~869~~342		$	31,~~583~~517

The accompanying notes are an integral part of the consolidated financial statements.

VIB CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(A) General

See Note A of Notes to Financial Statements incorporated by reference in the Company’s 2000 Annual Report on Form 10-K for a summary of significant accounting policies.

The unaudited financial statements included herein were prepared from the books of the Company in accordance with generally accepted accounting principles and reflect all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Company’s 2000 Annual Report on Form 10-K, and reflect adjustments that are solely of a normal, recurring nature. The current interim periods reported herein are included in the fiscal year subject to independent audit at the end of the year. The unaudited financial statements of VIB Corp include the accounts of the Company and its wholly owned subsidiaries, Valley Independent Bank, Valley Capital Trust, VIBC Capital Trust I, and VIBC Services Company. All significant intercompany ~~accounts~~ accounts and transactions have been eliminated in the consolidated financial statements. Certain items previously reported have been reclassified to conform to the current period’s classifications.

(B) Investment Securities

The Company’s investment securities portfolio at ~~June~~September 30, 2001 had a net unrealized ~~loss~~gain of approximately $ 252,182,000, as compared with a net unrealized loss of approximately $1,027,000 at December 31, 2000, an increase during the ~~six~~nine months beginning January 1, 2001 of $13,~~002~~209,000. The change for the period is attributable to a declining interest rate environment.

Investment Securities

				June 30, 2001
		September 30, 2001
						Gross		~~Gross~~		Gross		~~Gross~~
		Amortized		~~Amortized~~		Unrealized		~~Unrealized~~		Unrealized		~~Unrealized~~		Fair		~~Fair~~
($ In 000's)		Cost		~~Cost~~		Gains		~~Gains~~		Losses		~~Losses~~		Value		~~Value~~
Available-for Sale Securities:
	U.S. Treasury Securities	$	355	$	~~1,231~~	$	2	$	—		—	$	—	$	357	$	~~1,231~~
	U.S. Government and Agency Securities		133,993		~~74,337~~		1,630		28		55				135,568		~~74,365~~
	State and Political Subd.		42,895		~~43,068~~		633		—		120		94		43,408		~~42,974~~
	Mortgage-Backed Securities		24,932		~~5,273~~		232		~~135~~		5		—		25,159		~~5,408~~
	Other Equity	~~Other Equity~~	8,561		~~3,944~~		166		20		302		~~114~~		8,425		~~3,850~~
		$	210,736	$	~~127,853~~	$	2,663	$	~~183~~	$	482	$	~~208~~	$	212,917	$	~~127,828~~
Held-to-Maturity Securities:
	Mortgage-Backed Securities	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


		December 31, 2000

		Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
($ In 000's)		Cost		Gains		Losses		Value

Available-for Sale Securities:
U.S. Treasury Securities		$	1,540	$	29		—	$	1,569
U.S. Government and Agency Securities			81,411		196	$	840		80,767
State and Political Subd.			67,709		906		1,013		67,602
Mortgage-Backed Securities			21,576		95		217		21,454
Other Equity			18,668		118		301		18,485

		$	190,904	$	1,344	$	2,371	$	189,877
	Held-to-Maturity Securities:
Mortgage-Backed Securities		$	2,441	$	—	$	16	$	2,425

Investment securities carried at approximately $~~81,~~195,712,000 and $166,427,000, at ~~June~~September 30, 2001 and December 31, ~~2000~~@nbsp2000, respectively, were ~~pledged~~ pledged to secure public deposits, bank advances and other purposes as required by law.

The Company’s loan portfolio consists primarily of loans to borrowers within southern and central California, Las Vegas, Nevada and Yuma, Arizona. Although the Company seeks to avoid concentrations of loans to a single industry or based upon a single class of collateral, real estate and agricultural associated businesses are among the principal industries in the Company’s market area. As a result, the Company’s loan and collateral portfolio are, to some degree, concentrated in those industries.

The Company also originates real estate related and farmland loans for sale to governmental agencies and institutional investors. At ~~June~~September 30, ~~2001~~ 2001 and December 31, 2000 the Company was servicing approximately $8882,~~317~~144,000 ~~and~~ and $98,368,000, respectively, in loans previously sold.

A summary of the changes in the allowance for credit losses follows:

($ In 000's)	June 30, 2001			December 31, 2000
	September 30, 2001		December 31, 2000
($ In 000’s)
Balance at beginning of year	$	8,298		$	5,696
Additions to the allowance charged to expense		12,~~500~~250			2,905
Additions due to purchase of Kings River State Bank		—			654
Recoveries on loans charged off		45202			158
Loans charged off		~~349~~877			1,115
Balance at end of period	$	9,~~494~~873		$	8,298

A summary of nonperforming loans and assets follows:

($ In 000's)				June 30, 2001				December 31, 2000
			September 30, 2001				December 31, 2000
Non-accrual loans				$	5,701			$	12,302
($ In 000’s)
Loans 90 days past due and still accruing					146				83
Non-accrual loans			$	14,001			$	12,302
		Total nonperforming loans			5,847				12,385
Loans 90 days past due and still accruing				228				83
Other Real Estate Owned					2,296				1,360
	Total nonperforming loans			14,229				12,385
		Total nonperforming assets		$	8,143			$	13,745
Other Real Estate Owned				2,652				1,360
Nonperforming loans to total ending loans					.70	%			1.50	%
	Total nonperforming assets		$	16,881			$	13,745
Nonperforming assets to total loans and Other Real Estate Owned					.98	%			1.66	%
Nonperforming loans to total ending loans				1.67	%			1.50	%
Nonperforming assets to total loans and Other Real Estate Owned				1.96	%			1.66	%

(D) Other Expenses

Other expenses for the periods indicated are as follows:

($ In 000's)	~~June~~September 30, 2001		~~June~~September 30, 2000
Data Processing	$	12,~~407~~184	$	12,~~359~~011
Advertising		~~232~~426		~~319~~435
Legal and Professional		12,~~749~~416		12,~~393~~023
Regulatory Assessments		82124		85172
Insurance		5690		94213
Amortization of Intangibles		~~643~~965		~~527~~965
Office Expenses		1,~~239~~939		1,~~152~~747
Promotion		~~927~~1,321		~~807~~1,190
Other		1,~~009~~618		1,~~011~~459
Total Other Expenses	$	711,~~344~~083	$	610,~~747~~215

(E) Earnings Per Share

Basic earnings per share are calculated based on the weighted average number of common shares outstanding during each period as follows: 12,~~607~~631,~~815~~730 for the three months ended ~~June~~September 30, 2001 and 12,~~542~~534,~~383~~970 for the three ~~months~~ months ended ~~June~~September 30, 2000; 12,~~582~~595,~~906~~750 for the ~~six~~nine months ended ~~June~~ September 30, 2001 and 12,~~537~~531,~~135~~057 for the ~~six~~nine months ended ~~June~~September 30, 2000.

Diluted earnings per share for the three and ~~six~~nine-month periods ended ~~June~~ September 30, 2001 and 2000, are computed by dividing net earnings by the ~~weighted~~ weighted average common equivalent shares outstanding during the respective periods as follows: 12,~~665~~741,~~013~~965 for the three months ended ~~June~~September 30, 2001 and 12,~~560~~552,~~069~~536 for the three months ended ~~June~~September 30, 2000; 12,~~635~~667,652 for the ~~six~~nine months ended ~~June~~ September 30, 2001 and 12,~~563~~554,~~812~~460 for the ~~six~~nine months ended ~~June~~September 30, 2000. Common share equivalents include dilutive common stock option share equivalents determined by using the treasury stock method.


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This analysis is designed to provide a more complete understanding of the material changes and trends related to the Company’s financial condition, results of operations, cash flow and capital resources. This discussion should be read in conjunction with the attached Financial Statements included in Item 1, and the Company’s Annual Report on Form 10-K. This document may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. For a discussion of factors that could cause actual results to differ, please see the Company’s publicly available Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the year ended December 31, 2000 and particularly the discussion of “Other Significant Factors” within that document.

GENERAL

VIB Corp was incorporated in California on November 7, 1997 under the laws of the State of California at the direction of the Board of Directors of Valley Independent Bank (“VIB”) for the purpose of becoming a bank holding company. The holding company organization was consummated on March 12, 1998, pursuant to a Plan of Reorganization and Merger Agreement dated November 18, 1997, and each outstanding share of VIB’s Common Stock was converted into one share of the Company’s Common Stock and all outstanding shares of VIB’s Common Stock were transferred to the Company in a transaction accounted for as a pooling of interests. Further, each outstanding warrant to purchase VIB’s Common Stock, issued in connection with VIB’s 1997 unit offering, was converted into a warrant to purchase the Company’s Common Stock. The conversion period for these warrants expired on October 29, 1999.

On January 28, 1999, VIB Corp acquired Bank of Stockdale, F.S.B., Bakersfield, California (“BOS”). As a result of the merger, the Company acquired total assets of $144.4 million, comprising $9.1 million in cash and due from banks, $23.5 million in securities and investments, $102.4 million in net loans and $9.4 million in other assets. Total liabilities assumed amounted to $134.6 million, of which $128.9 million comprised deposits. The remainder represented other borrowed funds and other liabilities.

The BOS merger was accounted for as a pooling of interests. The Company issued approximately 2,730,589 shares of its Common Stock (adjusted for subsequent stock dividends) in exchange for all 1,212,265 shares of Stockdale’s issued and outstanding common stock.

On January 22, 1999, VIB acquired Fremont Investment & Loan’s Hemet branch office, including substantially all the deposits of the branch. VIB assumed approximately $112 million in deposits and the lease on the branch premises, and acquired approximately $27,000 in loans as well as cash on hand and fixtures and equipment associated with the branch. The consideration paid amounted to approximately $1.12 million. Goodwill arising from the transaction totaled approximately $1.14 million.

It was anticipated that VIB would require additional capitalization in connection with the branch acquisition. On February 5, 1999, the Company raised approximately $22.4 million in net proceeds from an offering of up to 23,000 Capital Securities in a private placement. The proceeds were used to increase VIB’s capital by $8.5 million and the balance was used for the acquisition of Kings River State Bank (“KRSB”) and general corporate purposes.

The Company formed a wholly-owned business trust subsidiary, Valley Capital Trust (the “Trust”), pursuant to the laws of the State of Delaware, for the specific purpose of (1) investing in the Company’s 9.00 % Junior Subordinate Debentures (the “Debentures”), due February 5, 2029; (2) selling 9.00 % Cumulative Capital Securities (the “Capital Securities”), representing a 97 % beneficial ~~interests~~interest in the Debentures owned by the Trust; and (3) issuing beneficial ~~interest~~interests in the Debentures owned by the Trust.

On February 5, 1999, the Company issued $23.093 million in Debentures to the Trust. Concurrently, the Trust issued $22.4 million of the Capital Securities to the accredited investors and $693,000 of Common Securities to the Company. The Debentures were purchased by the Trust concurrently with the Trust’s issuance of the Capital Securities and Common Securities. The proceeds to the Company, net of the Placement Agent’s fees and other offering expenses, was approximately $22.4 million which is treated as Tier 1 capital for regulatory purposes.

The interest on the Capital Securities is deductible. The Company has the right, assuming that no default has occurred, to defer interest payments at any time and for a period of up to twenty consecutive calendar quarters. The Capital Securities will mature on February 5, 2029, but can be called after February 5, 2009.

On January 7, 2000, VIB Corp merged with Kings River Bancorp, Reedley, California, and acquired Kings River State Bank as a wholly-owned subsidiary. Kings River Bancorp’s shareholders received approximately $21.7 million in exchange for their stock.

For the year ended December 31, 1999, Kings River Bancorp had total assets of $87.2 million, interest and non-interest income of $8.0 million and pretax income of $1.9 million. The acquisition was accounted for using the purchase method of accounting in accordance with Accounting Principals Board Opinion No. 16, “Business Combinations.” Under this method of accounting, the purchase price is allocated to the assets acquired and deposits and liabilities assumed based on their fair values as of the acquisition date. Goodwill arising from this transaction totaled $13.6 million and is being amortized over twenty years on a straight-line basis. The results of Kings River Bancorp’s operations were included in those reported by the Company beginning January 10, 2000.

In July 2000, the Company raised approximately $10.0 million in net proceeds from an offering of “trust preferred” securities in a private placement conducted as a part of a pooled offering sponsored by First Union Securities, Inc. (“First Union”) acting as the placement agent. On July 12, 2000, the Company entered into a Placement Agent Agreement (the “Placement Agent Agreement”) with First Union. Concurrently, the Company formed a wholly-owned New York common law trust subsidiary, VIBC Capital Trust I, for the specific purpose of: (1) investing in the Company’s 11.695% Junior Subordinated Notes (the “Notes”), due July 19, 2030; (2) selling 11.695% Preferred Securities (the “Preferred Securities”), representing a 97% beneficial interest in the Notes owned by VIBC Capital Trust I; and (3) issuing Common Securities to the

Company, representing a 3% beneficial interest in the Notes owned by VIBC Capital Trust I.

On July 26, 2000, the Company issued $10.309 million in Notes to VIBC Capital Trust I, which, in turn, issued $10.0 million of the Preferred Securities to First Union and $309,000 of the Common Securities to the Company. The proceeds to the Company, net of First Union’s fees and other offering expenses, was approximately $9.6 million, of which $1.4 million is treated as Tier I capital for regulatory purposes with the remainder being treated as Tier II capital. The proceeds were used to increase VIB’s capital by $8.5 million, with the balance used for general corporate purposes.

The interest on the Notes will be deductible and paid by the Company and represents the sole source of VIBC Capital Trust I’s revenue available for distributions to the holders of the Preferred Securities. The Company has the right, assuming that no default has occurred regarding the Notes, to defer interest payments on the Notes, at any time and for a period of up to twenty consecutive calendar quarters. The Preferred Securities will mature concurrently with the Notes on July 19, 2030; but can be called after July 19, 2010.

During 2000 and 2001 the Company did not conduct any business other than through VIB, BOS and KRSB (collectively, the “Banking Subsidiaries”). At year-end, the Company had total consolidated assets of $1,143 million. ~~Upon consummation of the transactions described~~Neither ~~above,~~ the Company ~~conducts~~nor ~~its banking business only through VIB, BOS and KRSB (collectively,~~ the “Banking Subsidiaries~~”).~~ ~~Neither the Company nor the Banking Subsidiaries~~ earn revenues from sources outside of the United States.

During the first quarter of 2001, the Company’s board of directors made a strategic decision to merge BOS and KRSB into VIB. Effective May 24, 2001, BOS and KRSB were merged into VIB, which continues to operate under its state charter as a member bank. All of the former offices of BOS and KRSB operate as branches of VIB; however, many continue to use the BOS and KRSB names as DBA’s. The consolidation is anticipated to provide significant cost savings and improve operating efficiencies by removing layers of regulatory reporting and operating expenses. The Company expensed approximately $435,000 in restructuring charges related to the consolidation during the first quarter ~~and~~of 2001, $90,000 in the second quarter and $27,000 in the third quarter.

Due to the reduction in interest rates by the Federal Reserve Bank, the Company had $59.3 million in securities called from subsidiary portfolios. These calls changed the structure of the balance sheet and its interest rate risk characteristics. Additionally, security sales were performed to offset restructuring and one-time costs incurred in the first and second quarter as well as to mitigate the interest rate risk incurred by the unexpected shortening of the securities portfolio duration.

On April 24, 2001, the Board of Directors approved a 3% stock dividend for shareholders of record on May 25, 2001. The dividend was paid on June 15, 2001. All per share figures have been adjusted for this and previous stock dividends.

During the second quarter of 2001, the Company made a strategic decision to invest in an offering of preferred stock of Lenders Services Acquisition Corporation (“LSAC”). LSAC is a newly organized Delaware corporation that was formed for the purpose of acquiring all of the outstanding stock of Diversified Capital Holdings, Inc. (“Diversified”). Diversified is a California based insurance holding company whose principal subsidiaries are Northern ~~Counties~~ Counties Title Insurance Company and South Coast Title Company. Through its subsidiaries, Diversified provides real estate title insurance agency and underwriting services, trustee sale guarantees and services related to tax deferred real property exchanges. The Company invested $2.0 million in the private placement which closed on September 14, 2001.

Due to the reduction in interest rates by the Federal Reserve Bank during the year, the Company had $66.7 million in securities called from the Banking Subsidiaries’ portfolios. These calls changed the structure of the balance sheet and its interest rate risk characteristics. Additionally, security sales were performed to offset restructuring and

~~agency~~one-time ~~and underwriting~~costs ~~services,~~incurred ~~trustee~~in ~~sale~~the ~~guarantees~~ first and ~~services~~second ~~related~~quarter as well as to ~~tax deferred~~mitigate ~~real~~the ~~property~~interest ~~exchanges.~~rate ~~The~~risk ~~closing~~incurred by the unexpected shortening of the ~~private~~securities ~~placement~~portfolio isduration. During July ~~expected~~and toAugust, ~~occur~~the ~~before~~Company ~~September~~employed two different leveraging strategies, totaling $75 30million, ~~2001~~to enhance earnings. ~~The~~These ~~Company~~strategies, iswhich ~~proposing~~involved toborrowing ~~invest~~at upa tofixed $2cost and reinvesting at a higher fixed rate, hold limited interest rate risk and provide similar positive earnings in both increasing and decreasing interest rate environments.~~0 million.~~

Consolidated net income for the three months ended ~~June~~September 30, 2001 was $2.32 million or $.18 per share diluted based upon average shares outstanding of 12,~~607~~741,~~815~~965. This compares with net income of $2.03 million or $.1618 per share fully diluted based upon the average shares outstanding of 12,~~542~~552,~~383~~536 for the same period in 2000. Consolidated net income for the ~~six~~nine months ended ~~June~~ September 30, 2001, was $46.46 million or $.3552 per share diluted based upon average shares outstanding of 12,~~635~~667,652. This compares with net income of $36.81 million or $.3048 per share fully diluted based upon the average shares outstanding of 12,~~563~~554,~~812~~460 for the same period in 2000.

Total gross loans at ~~June~~September 30, 2001 were $~~830~~845.47 million, which represented an an increase of $622.70 million or 02.87% from December 31, 2000. Since ~~June~~ September 30, 2000, total gross loans have increased $6551.50 million or 86.564%. During the ~~recent~~ ~~period~~recent periods, the Company undertook a systematic review of its loan portfolio, resulting in several reclassifications to conform to regulatory “call report” categories. The loan balances for prior periods have not been reclassified.

Total deposits at September 30, 2001 were $891.3 million, which represented a decrease of $19.0 million or 2.1% from December 31, 2000. Since September 30, 2000, total deposits have increased $46.1 million or 5.4%.

The Company’s Internet “home page” on the World Wide Web is: http://www.vibcorp.com. VIB has a home page, located at: http://www.vibank.com.

NET INTEREST INCOME

Average interest earning assets totaled $~~995~~999.03 million during the ~~six~~nine months ended ~~June~~September 30, 2001, an increase of $5748.43 million or 65.21% compared to the ~~same~~ same period last year. This growth was highlighted by an increase in average ~~total~~ total loans of $8072.78 million or 119.07% to $~~815~~821.6 million. Growth in average ~~total~~ total loans was somewhat offset by a decrease in average securities from $~~202~~201.74 million for the ~~six~~nine months ended ~~June~~September 30, 2000 to $~~179~~172.48 million for the ~~same~~ same period in 2001 representing a decrease of $2328.36 million, or 1114.52%. ~~Average~~ Average interest bearing liabilities in the first ~~six~~nine months of 2001 increased $2212.3 million or 21.85% to average $~~816~~815.91 million as compared to the same period ~~last~~ last year. During this comparative period average interest bearing deposit categories increased $6143.40 million or 96.6% to $~~700~~693.60 million. Average borrowed funds decreased $3930.18 million or 2520.21% to $~~116~~122.30 million during the same time frame.

Interest income for the ~~six~~nine-month period ending ~~June~~September 30, 2001 was $4364.70 million, ana ~~increase~~decrease of $2.03 million or 4.84% compared to the first ~~six~~nine months in in 2000. The ~~increase~~decrease in interest income was primarily the result of a declining interest rate environment on the loan portfolios adjustable rate loans and the reduction in securities offset somewhat by loan volume increases previously discussed. The yield on interest earning assets decreased 946 basis points to 8.8657% for the ~~six~~nine-month period ended ~~June~~September 30, 2001 from 89.9503% for the comparative period last year. Although a ~~declining interest~~ ~~rate environment characterized the first six months of 2001, the decreased~~ ~~yield would have been lower if not for the relatively larger growth in the loan~~ ~~portfolio which carries a higher yield than other investments.~~

Interest expense increased $.5 million or 2.7% during the six months ended June 30, 2001 as compared to the same period last year. The increase in interest expense was principally the result of volume increases in interest-bearing deposits partially offset by a decrease in the volume of borrowed funds. The cost of interest bearing funds increased 1 basis point from 4.85% for the six-months ended June 30, 2000 to 4.86% for the six

declining interest rate environment characterized the first nine months ~~ended~~of ~~June 30~~2001, ~~2001.~~the ~~This increase~~decreased inyield awould ~~declining~~have been ~~rate~~lower ~~environment~~if isnot ~~partially~~for ~~due~~the torelatively ~~interest~~larger ~~expense incurred~~growth onin ~~notes~~the ~~issued~~loan toportfolio ~~VIBC~~which carries ~~Capital~~a ~~Trust~~higher Iyield ~~discussed~~than ~~previously~~other investments.

~~Net~~Interest ~~interest~~expense ~~income~~decreased ~~was~~ $242.02 million ~~for~~or 7.4% during the ~~six~~nine months ~~ending June~~ended September 30, 2001~~, representing~~ anas ~~increase~~compared ofto ~~$1.5 million or 6.6% from~~ the same period ~~ended June 30,~~last ~~2000~~year. The ~~net~~decrease in interest ~~spread,~~expense ~~which~~was ~~represents~~principally the ~~difference between~~result ~~the~~of ~~rate~~volume ~~earned~~decreases onin ~~average~~borrowed funds ~~interest earning assets~~ and ~~the~~a ~~rate~~declining ~~paid on average~~ interest ~~bearing~~rate ~~liabilities,~~environment ~~decreased~~partially tooffset ~~4.00%~~by ~~for~~an ~~the period ending~~increase ~~June 30,~~in ~~2001, compared to 4.09% for~~ the ~~same~~volume ~~period~~of ~~in 2000. Net~~ interest ~~income~~ asbearing adeposits. ~~percentage~~The cost of ~~average~~ interest ~~earning~~bearing ~~assets,~~funds decreased or43 ~~the~~basis ~~net~~points ~~interest margin,~~from ~~increased to 4~~5.8700% for the ~~period~~nine-months ~~ending~~ended ~~June~~September 30, 2000 ~~2001, compared~~ to 4.8357% for the ~~period~~nine ~~ending~~months ~~June~~ended September 30, ~~2000~~2001. ~~The~~This decrease ~~in net interest~~is ~~spread~~primarily ~~was~~ due ~~primarily~~ to the ~~faster~~declining ~~repricing of the Company’s earning assets as compared to~~ interest ~~bearing~~rate ~~liabilities~~environment in awhich ~~period~~the ~~of declining~~Company ~~interest~~currently ~~rates.~~operates ~~The~~along ~~increase~~with ina ~~net~~deposit ~~interest~~mix ~~margin~~change ~~was~~that ~~partially~~has ~~due~~less toreliance ~~the collection of $469,0000 in interest~~ on ~~loans previously on a non-accrual basis.~~ ~~This~~higher ~~collection~~costing ofcertificates ~~interest represented 10 basis points~~ of ~~net interest margin~~deposit.

~~For~~Net ~~the quarter ended June 30, 2001, net~~ interest income was $1236.2 million for the nine months ending September 30, ~~which~~2001, ~~was~~representing an increase of $1.09 million, or 85.87%, from the same period ended inSeptember 30, 2000. The net interest spread, ~~increased~~which 16represents ~~basis~~the difference ~~points~~between the rate earned on average interest earning assets and the rate paid on average interest bearing liabilities, decreased to 4.1600% for the ~~three months~~ ~~ended~~period ~~June~~ending September 30, 2001, ~~from~~compared to 4.0003% for the ~~three~~same ~~months~~period ~~ended June 30,~~ in 2000. ~~Similarly~~ Net interest income as a percentage of average interest earning assets, or the net interest margin, ~~also~~ increased ~~from~~to 4.7584% for the ~~quarter ended~~period ~~June~~ ending September 30, ~~2000~~2001, compared to 54.0181% for the ~~same~~ period inending ~~2001~~September 30, 2000. The decrease ~~increase~~ in net interest spread ~~and~~was ~~net~~due primarily to the faster repricing of the Company’s interest earning assets as compared to interest bearing liabilities in a period of declining interest rates. The increase in net interest margin ~~are~~was ~~mostly~~partially ~~attributable~~due to the collection of $469,0000 in interest on loans previously ~~classified~~on asa non-accrual asbasis. This collection of interest ~~previously~~represented ~~discussed~~7 basis points of net interest margin.

~~The~~For ~~year~~the ~~2000~~quarter ~~was~~ended ~~characterized~~September 30, by2001, anet ~~rising~~interest ~~rate~~income ~~environment.~~was ~~Interest rates~~$12.2 ~~began~~million, awhich ~~steady~~was ~~decline~~an ~~during~~increase ~~the~~of ~~first~~$.5 million, ~~six~~or ~~months~~4.0% offrom ~~2001.~~the ~~The~~same ~~yield~~period onin ~~earning~~2000. ~~assets~~The ~~for~~net ~~the~~interest ~~year~~spread ~~2000~~increased ~~was~~15 ~~9.10%~~basis aspoints ~~compared~~ to 84.9509% for the ~~six~~three months ended ~~June~~September 30, ~~2000~~2001 ~~and~~from ~~was 8~~3.8694% for the ~~six~~three months ended June 30, ~~2001~~2000. ~~The~~Similarly, ~~cost~~the ofnet interest ~~bearing~~margin ~~liabilities~~also ~~for~~increased ~~the~~from ~~year 2000 was 5~~4.1176% asfor the ~~compared~~quarter ended September 30, 2000 to 4.85% for the ~~six~~same ~~months~~period ~~ended~~in ~~June 30,~~2001. ~~2000~~The increase in net interest spread and ~~was~~net ~~4.86%~~interest ~~for~~margin ~~the~~are mostly attributable ~~six~~to ~~months~~the ~~ended~~collection ~~June 30,~~of ~~2001~~interest on loans previously classified as non-accrual as previously discussed.

~~During~~The year 2000 was characterized by a rising rate environment. Interest rates began a steady decline during the ~~three~~first nine months ~~ended~~of ~~June 30,~~ 2001,. The yield on earning assets ~~decreased 28~~for ~~basis~~the ~~points~~year to2000 8was 9.7110% as compared to 9.03% for the nine months ended September 30, 2000 and was 8.9957% for the ~~three~~nine months ended ~~June~~ September 30, ~~2000~~2001. The cost of interest bearing liabilities for the ~~quarter~~year ~~ended June~~2000 ~~30,~~was ~~2001,~~5.11% ~~also~~as ~~decreased~~compared ~~44 basis points~~ to 45.5500% ~~from~~for the nine months ended September 30, 2000 and was 4.9957% for the ~~quarter~~ nine months ended ~~June~~September 30, ~~2000~~2001.

~~PROVISION~~During ~~FOR~~the ~~CREDIT~~three ~~LOSSES~~months ended September 30, 2001, the yield on earning assets decreased 118 basis points to 8.06% as compared to 9.24% for the three months ended September 30, 2000. The cost of interest bearing liabilities for the quarter ended September 30, 2001, also decreased 132 basis points to 3.98% from 5.30% for the quarter ended September 30, 2000.

The allowance for credit losses at June 30, 2001 was $9.5 million, compared to $7.6 million at June 30, 2000, an increase of $1.9 million or 25.3%. As a percent of total loans, the allowance was 1.14% at June 30, 2001, compared to .99% at June 30, 2000 and 1.01% at December 31, 2000. Due to the California energy issue, and its possible effect on the Company’s loan portfolio, an additional allocation was added to the allowance in the first quarter of 2001. During the second quarter, as the Company gathered more information regarding the possible effect of the California energy issue on its loan customers, the Company removed this allocation. In the future the Company may again add to the allowance due to the risk of energy-related defaults but at the

~~current~~PROVISION ~~time~~FOR itCREDIT ~~has not~~LOSSES ~~perceived an increased level of risk due to this specific issue.~~

The ~~provision~~allowance for credit losses at September 30, 2001 was $19.9 million,~~500,000~~ compared ~~for~~to ~~the~~$7.8 million ~~first~~at ~~six~~September 30, ~~months~~2000, an increase of $2.1 million or ~~2001~~2.7%. As a percent of total loans, ~~compared~~the ~~with~~allowance $was 1.17% at September 30,~~550~~ 2001,~~000~~ ~~provided~~compared ~~for~~to ~~the~~.98% ~~six~~at ~~months ended June~~September 30, 2000~~, a~~ ~~decrease~~and ~~of 3~~1.201% at December 31, 2000. Due ~~The~~to ~~provision~~the ~~was~~California ~~$750~~energy issue,~~000~~ ~~for~~and its possible effect on the ~~second~~Company’s loan portfolio, an additional allocation was added to the allowance in the first quarter of 2001 ~~compared~~. toDuring ~~$700~~the second quarter,~~000~~ ~~for~~as the ~~second~~Company ~~quarter~~gathered more information regarding the possible effect of ~~2000~~the California energy issue on its loan customers, the Company removed this allocation. In the future the Company may again add to the allowance due to the risk of energy-related defaults but at the current time it has not perceived an ~~increase~~increased level of ~~$50,000~~risk ordue to this 7issue.1% The impact of the September 11th events on the Company’s loan portfolio is currently being assessed with some increased delinquencies noted in the hospitality industry.

~~Total~~The ~~non-performing~~provision ~~loans~~for ascredit oflosses ~~June 30~~was $2,250,000 ~~2001~~for ~~were~~the ~~$5.8 million~~first asnine ~~compared~~months toof ~~$3.8 million at June 30~~2001, ~~2000~~compared ~~and~~with $~~12.4 million at December 31~~2,225,000 ~~2000. Non-performing~~provided ~~loans~~for ~~decreased $6.6 million during~~ the ~~six~~nine months ended ~~June, 2001. The increase from June~~September 30, 2000 ~~to December 31~~, ~~2000~~an isincrease ~~primarily attributed~~of ~~to two unrelated loans moving into non-accrual status~~1.1%. ~~One~~The ofprovision ~~the loans~~ was ~~transferred~~$750,000 tofor ~~Other Real Estate Owned during~~ the ~~first~~third quarter of 2001 ~~and~~compared ~~partially~~to ~~sold.~~$675,000 ~~The~~for ~~remaining loan was assumed by a new borrower with added capital as collateral during~~ the ~~second~~third quarter. Byof ~~continuing to build the loan loss reserve~~2000, ~~combined~~an ~~with~~increase ~~the resolution~~ of ~~the two problem loans~~$75,000 ~~the~~or ~~Company anticipates continued improvement in its coverage and reserve ratios~~11.1%.

~~Net~~Total ~~charge~~non-~~offs~~performing ~~were~~loans ~~$304~~as of September 30,~~000~~ ~~for~~2001 ~~the~~were ~~six~~$14.2 million ~~months~~as compared ~~ended~~to ~~June~~$4.1 million at September 30, ~~2001~~2000 and $12.4 million ~~This~~at December ~~represents~~31, a2000. ~~decrease~~Non-performing ofloans increased $181.8 million during the nine months ended September,~~000~~ ~~when~~2001. ~~compared~~The increase from September 30, 2000 to ~~$322~~December 31,~~000~~ 2000 inis ~~net~~primarily ~~charge~~attributed ~~offs~~to two unrelated loans moving into non-accrual ~~for~~status. One of the ~~same~~loans ~~period~~was intransferred ~~2000~~to Other Real Estate Owned during the first quarter of 2001 and partially sold. ~~During~~The remaining loan was assumed by a new borrower with added capital as collateral during the second quarter. ~~ending~~The increase ~~June~~from December 31,2000 to September 30, 2001, after taking into effect ~~$60~~the removal of the two unrelated loans discussed previously,~~000~~ was ~~recorded~~primarily attributed into ~~net~~two ~~charge-offs~~related ~~compared~~loans toon ~~$200,000~~a ~~net~~hotel ~~charge~~moving into non-~~offs~~accrual status. These loans are fully secured and in the process of collection, with full recovery, including interest, expected over the ~~second~~next ~~quarter~~two quarters. By continuing to build the loan loss reserve, combined with the resolution of ~~2000~~the these problem loans, the Company anticipates continued improvement in its coverage and reserve ratios.

Net charge-offs were $674,000 for the nine months ended September 30, 2001. This represents a decrease of $132,000 when compared to $806,000 in net charge offs for the same period in 2000. During the third quarter ending September 30, 2001, $371,000 was recorded in net charge-offs compared to $484,000 in the third quarter of 2000.

VIB (previously the Banking Subsidiaries) has an established standard process for assessing the adequacy of the allowance for credit losses. In addition to reviewing the inherent risks of the loan portfolio, consideration is given to exposures such as economic conditions, credit concentrations, collateral coverage, the composition of the loan portfolio and trends in delinquencies. Specific allocations are identified by individual loans with general allocations assigned to the various loan categories. Loans classified by internal review or by the regulatory authorities are included in the process of assessing the adequacy of the allowance for credit losses. This process seeks to maintain an allowance level adequate to provide for potential losses.

Management of the Company believes the allowance at June 30, 2001, was adequate based on present economic conditions and its ongoing evaluation of the risks inherent in the loan portfolio.

NON-INTEREST INCOME

Total non-interest income amounted to $6.1 million for the six months ended June 30, 2001 representing an increase of $1.6 million or 35.7% compared with the same period in the prior year. The primary reason for the increase in non-interest income was $1.5 million in gains on the sale of investment securities. Another significant item was an increase of $142,000 in service charges and fee income, which was primarily attributable to increases in loan funding fees charged to 3rd parties and ATM charges.

Non-interest income for the quarter ended June 30, 2001 increased $626,000 to $3.1 million from $2.5 million for the same period in 2000. This increase is largely due to security sales totaling $641,000 in the second quarter of 2001.

Management of the Company believes the allowance at September 30, 2001, was adequate based on present economic conditions and its ongoing evaluation of the risks inherent in the loan portfolio.

NON-INTEREST INCOME

Total non-interest income amounted to $8.7 million for the nine months ended September 30, 2001 representing an increase of $2.0 million or 28.8% compared with the same period in the prior year. The primary reason for the increase in non-interest income was $1.5 million in gains on the sale of investment securities. Another significant item was an increase of $585,000 in service charges and fee income, which was primarily attributable to increases in loan funding fees charged to 3rd parties, ATM charges and an increase in deposit service charges in the third quarter to bring the Company more in line with its competition.

Non-interest income for the quarter ended September 30, 2001 increased $350,000 to $2.6 million from $2.3 million for the same period in 2000. This increase is primarily due to an increase of $.4 million in service charges and fee income as previously discussed.

NON-INTEREST EXPENSE

Total non-interest expense for the ~~six~~nine months ended ~~June~~September 30, 2001 was $2132.8 5 million, an increase of $2.08 million or 9.93% as compared to the same period in 2000. During the ~~first~~period ~~quarter~~ended September 30, 2001, the Company incurred approximately $~~435~~552,000 in non-recurring restructuring costs associated with the ~~planned~~ consolidation of its three subsidiary banks.

Salary expense during the ~~six~~nine months ended ~~June~~September 30, 2001 was $812.2 0 million, an increase of $~~661~~923,000 or 8.83% over the comparable period in 2000. The growth in salary expense is attributable to $200,000 in severance related to the restructuring charges discussed above and normal annual merit increases. Employee benefits expense was $24.80 million for the nine-month period ending ~~June~~ September 30, 2001, an increase of $~~227~~56,000 or 81.84% from the same period in the prior year. This increase is mostly due to a one time supplemental executive retirement plan ~~accrual~~ accruals for $~~237~~343,000, a $~~112~~115,000 increase in ~~workmen's~~ workers compensation insurance and an increase in payroll taxes of $84116,000 partially offset by the ~~company~~Company’s planned reduction in its contribution to the Employee Stock Ownership Plan of $~~208~~304,000.

Occupancy expense was $12,~~740~~671,000 for the ~~six~~nine-month period ended ~~June~~September 30, 2001, an increase of $~~238~~310,000 or 1513.91% as compared to the first ~~six~~nine months in 2000. Furniture and equipment expense was $12,~~757~~722,000 for the ~~six~~nine-month period ~~ended~~ ~~June~~ended September, 2001, an increase of $~~248~~449,000 or 1619.47% from the same period in 2000. These increases were primarily the result of the Company’s expansion of ~~its~~ its geographic market area through the addition of full service branches in Fresno, Selma and Visalia, California and Las Vegas, Nevada along with ~~increased~~ increased depreciation expense on planned additions to computer hardware and ~~software~~ software expenditures.

Other operating expense amounted to $711.31 million during the ~~six~~nine-month period ended ~~June~~September 30, 2001, an increase of $~~597~~868,000 or 8.85% from the same period in in the prior year. The increase was largely attributable to increases in legal ~~and~~ ~~other~~and professional fees.

For the three months ended June 30, 2001, non-interest expense was $11.0 million. This was an increase of $919,000 or 9.1% for the same period in 2000. This was due mainly to increases in salaries and employee benefits of $475,000, other professional fees of $142,000, and occupancy and equipment increases of $246,000.

INCOME TAXES

Income tax expense for the six months ending June 30, 2001 was $2,403,000 as compared with $1,834,000 for the same period in 2000. The increase in expense was primarily attributable to a $3.3 million increase in taxable operating income, partially offset by a $2.0 million increase in non-interest expense. The Company’s effective tax rate was 35.3% for the six months ended June 30, 2001 as compared to 32.4% for the same period in the prior year.

Income taxes for the second quarter were $1,291,000, an increase of $329,000 or 34.1% from the second quarter of 2000. The increase in expense was primarily related to a $1,711,000 increase in the Company’s taxable operating income offset by a $919,000 increase in non-interest expense. The Company’s effective tax rate was

~~35.9%~~For ~~for~~ the three months ended ~~June~~September 30, 2001, asnon-interest ~~compared~~expense towas $10.7 32million. This was an increase of $779,000 or 7.9% for the same period in 2000. This was due mainly to increases in salaries and employee benefits of $236,000, of which $107,000 related to a one time supplemental executive retirement plan accrual, other professional fees of $142,000, and occupancy and equipment increases of $273,000 related to the ~~prior~~Company’s ~~year~~expansion of its geographic area as discussed above.

INCOME TAXES

Income tax expense for the nine months ending September 30, 2001 was $3,554,000 as compared with $2,996,000 for the same period in 2000, an increase of $558,000 or 18.6%. The increase in expense was primarily attributable to a $4.3 million increase in taxable operating income, partially offset by a $2.8 million increase in non-interest expense. The Company’s effective tax rate was 34.9% for the nine months ended September 30, 2001 as compared to 33.0% for the same period in the prior year.

Income taxes for the third quarter were $1,151,000, a decrease of $11,000 or .9% from the third quarter of 2000. The Company’s effective tax rate was 34.0% for the three months ended September 30, 2001 as compared to 33.9% for the same period in the prior year.

CAPITAL RESOURCES

Total stockholders’ equity as of ~~June~~September 30, 2001 was $7680.20 million, which represented an increase of $59.31 million from December 31, 2000, and $14.30 million from ~~June~~September 30, 2000. The increase since December 31, 2000 included $46.4 6 million in net income and a $1.69 million ~~decrease~~increase in the cumulative ~~unrealized~~ unrealized loss on securities classified as available for sale. The increase since ~~June~~ September 30, 2000 included $9.2 million in net income and a $4.82 million increase ~~decrease~~ in the cumulative unrealized loss on securities classified as available for sale.

Under regulatory guidelines, capital adequacy is measured as a percentage of risk-adjusted assets in which risk percentages are applied to assets on as well as off the balance sheet. Tier 1 capital consists of common stock, a qualifying percentage of the Capital Securities, and retained earnings and total capital includes a portion of the allowance for credit losses. At ~~June~~ September 30, 2001 the Tier 1 and total risk based capital ratios were 9.6955% and 11.6030%, respectively, compared to 8.5464% and 910.4877%, respectively, at ~~June~~ September 30, 2000. The current minimum regulatory guidelines for Tier 1 and total risk-based capital ratios are 4.0% and 8.0%, respectively. The leverage ratio, which is a measure of Tier 1 capital to adjusted average assets, was 7 8.8500% at ~~June~~September 30, 2001, compared to 6.7890% at ~~June~~September 30, 2000. The Company’s leverage ratio also exceeds the current regulatory minimum of 3.0%. Accordingly, the Company’s capital ratios exceed all regulatory minimums and support future planned growth, but may not be adequate to support additional acquisitions.

LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

The Company’s consolidated liquidity position remained adequate to meet future contingencies. At June 30, 2001, the Company had $63.0 million in net Federal funds purchased and FHLB advances outstanding. This compared to $113.9 million in net Federal funds outstanding at June 30, 2000. Since December 31, 2000, net Federal funds purchased and FHLB advances have decreased $56.0 million. This reduction in borrowed funds is due primarily to the reduction in interest rates since the beginning of 2001, resulting in $59.3 million in securities called from VIB’s (previously the Banking Subsidiaries’) investment portfolio.

The Company’s consolidated liquidity ratio at June 30, 2001 was 13.9%. This represented a decrease from 19.4% at June 30, 2000 and a decrease from 20.0% at December 31, 2000. This decrease has been the result of an increase in loan growth that has exceeded the growth in the deposit base as well as a result of investment maturities, calls and paydowns which have offset the reduction in borrowings as the balance sheet has contracted. While the 13.9% consolidated liquidity ratio is below stated Company policy, adequate sources of liquidity are available for the Company to meet existing and future funding commitments. Steps have been implemented to increase the ratio to accepted policy levels.

LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

The Company’s consolidated liquidity position remained adequate to meet future contingencies. At September 30, 2001, the Company had $156.9 million in net Federal funds purchased and FHLB advances outstanding. This compared to $143.9 million in net Federal funds outstanding at September 30, 2000. Since December 31, 2000, net Federal funds purchased and FHLB advances have increased $37.9 million. This increase in borrowed funds is due primarily to the $75 million in leveraging strategies discussed previously and put in place in July and August of 2001.

The Company’s consolidated liquidity ratio at September 30, 2001 was 20.32%. This represented an increase from 19.78% at September 30, 2000 and an increase from 19.97% at December 31, 2000.

VIB’s (previously the Banking Subsidiaries’) Asset/Liability Committee (“ALCO”) functions to manage the maintenance of liquidity and the preservation of net interest income when subjected to fluctuations in market interest rates. The ability to meet existing and future funding commitments is the measure of liquidity. Liquidity is also needed to meet borrowing needs, deposit withdrawals and asset growth. VIB develops liquidity through deposit growth, maturities and repayments of loans and investments, net interest income, fee income and access to purchase funds through correspondent banks or other entities.

The ALCO manages interest rate risk to minimize the impact of fluctuating interest rates on earnings. Simulation techniques are used that attempt to measure the volatility of changes in the level of interest rates, basic banking interest rate spreads, and the shape of the yield curve. The primary method of measuring the sensitivity of earnings of changing market interest rates is to simulate expected cash flows using varying assumed interest rates while also adjusting the timing and magnitude of non-contractual deposit repricing to more accurately reflect anticipated pricing behavior. These simulations include adjustments for the lag in loan repricing and the spread and volume elasticity of interest-bearing deposit accounts, regular savings, and money market deposit accounts.

The principal function of interest rate risk management is to maintain an appropriate relationship between those assets and liabilities that are sensitive to changing market interest rates. VIB closely monitors the sensitivity of its assets and liabilities on an ongoing basis and projects the effect of various interest rate changes on its net interest margin. Interest sensitive assets and liabilities are defined as those assets or liabilities that mature or reprice within a designated time-frame. The difference between rate sensitive assets and rate sensitive liabilities for a specified period of time is known as “gap”.

Management believes VIB’s current mix of assets and liabilities provides a reasonable level of risk related to significant fluctuations in net interest income and the resulting volatility of VIB’s earning base. ALCO and the Board of Directors reviews interest rate risk in relation to its effect on net interest income, net interest margin, and the net portfolio value (“NPV”) of the Company.

NPV represents the market value of the portfolio equity and is equal to the market value of assets minus the market value of liabilities. VIB’s Board of Directors has adopted interest rate risk policies, which establishes a maximum limit of decrease in the NPV in the event of sudden and sustained increases and decreases in market interest rates. The following tables present the Company’s projected changes in NPV and net interest income for the various rate shock levels as of June 30, 2001:

NPV represents the market value of the portfolio equity and is equal to the market value of assets minus the market value of liabilities. VIB’s ~~CORP~~Board of ~~Change~~Directors has adopted interest rate risk policies, which establishes a maximum limit of decrease in ~~Net~~the ~~Portfolio~~NPV ~~Value~~in the event of sudden and sustained increases and atdecreases ~~June~~in market interest rates. The following tables present the Company’s projected changes in NPV and net interest income for the various rate shock levels as of September 30, 2001:

Change In Interest Rates	Net Portfolio		Actual			Percentage
	Value		Change			Change
(Dollars in Thousands)
300 basis point rise	$	179,389		$(9,650	)		-5.1	%
200 basis point rise		185,367		(3,673	)		-1.9	%
100 basis point rise		192,095		3,056			1.6	%
Base Rate Scenario		189,039		—			—
100 basis point decline		179,789		(9,251	)		-4.9	%
200 basis point decline		164,539		(24,500	)		-13.0	%
300 basis point decline		146,155		(42,885	)		-22.7	%

VIB CORP
Change in Net Portfolio Value
at September 30, 2001

Change in Net Interest Income at June 30, 2001


	Net Portfolio		Actual			Percentage
Change In Interest Rates	Value		Change			Change

(Dollars in Thousands)
300 basis point rise	$	170,520		($14,565	)		-7.9	%
200 basis point rise		179,916		(5,169	)		-2.8	%
100 basis point rise		189,482		4,398			2.4	%
Base Rate Scenario		185,084		—			—
100 basis point decline		172,697		(12,387	)		-6.7	%
200 basis point decline		157,972		(27,113	)		-14.6	%
300 basis point decline		141,691		(43,394	)		-23.4	%

Change In Interest Rates	Net Interest		Actual			Percentage
	Income		Change			Change
(Dollars in Thousands)
300 basis point rise	$	47,780	$	2,482			5.5	%
200 basis point rise		47,275		1,977			4.4	%
100 basis point rise		46,606		1,308			2.9	%
Base Rate Scenario		45,298		—			—
100 basis point decline		43,681		(1,617	)		-3.6	%
200 basis point decline		41,482		(3,816	)		-8.4	%
300 basis point decline		39,677		(5,621	)		-12.4	%

Change in Net Interest Income
at September 30, 2001


	Net Interest		Actual			Percentage
Change In Interest Rates	Income		Change			Change

(Dollars in Thousands)
300 basis point rise	$	47,990		($471	)		-1.0	%
200 basis point rise		48,653		193			0.4	%
100 basis point rise		49,081		621			1.3	%
Base Rate Scenario		48,460		—			—
100 basis point decline		46,776		(1,684	)		-3.5	%
200 basis point decline		44,739		(3,721	)		-7.7	%
300 basis point decline		40,578		(7,882	)		-16.3	%

Certain shortcomings are inherent in the method of analysis presented in the computation of NPV. Although certain assets and liabilities may have similar maturities or periods within which they will reprice, they may react differently to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. There may also be repayment risk if interest rates rise on loans.

Computation of forecasted effects of hypothetical interest rate changes should not be relied upon as indicative of actual future results. Further, the computations do not ~~contemplate any actions the ALCO could undertake in~~ ~~response to change in interest rates.~~

~~obtain additional~~contemplate ~~funds~~any ~~through~~actions ~~dividends paid by, and fees for services provided to, its subsidiaries. Regulations limit~~ the ~~amount~~ALCO ofcould ~~dividends~~undertake ~~as well as service~~in ~~fees~~response ~~paid by subsidiaries. The Company’s expenses have been primarily covered by fees charged~~ to ~~and~~change ~~dividends~~in ~~received~~interest ~~from VIB and it is anticipated that the Company will be able to continue to rely on dividends from VIB to fund its separate operations and obligations~~rates. ~~The Company may not always be able to~~ ~~rely solely on its current or future subsidiaries to meet its obligations,~~ ~~including obligations under the Capital Securities, or to maintain its separate liquidity. Under such circumstances, the Company would be forced to seek other means to raise capital.~~

The Company is a legal entity, separate and distinct from its subsidiaries. Although there exists the ability to raise capital on its own behalf (such as the recent private placement of Capital Securities) or borrow from external sources, the Company may obtain additional funds through dividends paid by, and fees for services provided to, its subsidiaries. Regulations limit the amount of dividends as well as service fees paid by subsidiaries. The Company’s expenses have been primarily covered by fees charged to and dividends received from VIB and it is anticipated that the Company will be able to continue to rely on dividends from VIB to fund its separate operations and obligations. The Company may not always be able to rely solely on its current or future subsidiaries to meet its obligations, including obligations under the Capital Securities, or to maintain its separate liquidity. Under such circumstances, the Company would be forced to seek other means to raise capital.

VIB (previously the Banking Subsidiaries) does not maintain a trading account for any class of financial instrument nor does it engage in hedging activities or purchase high-risk derivative instruments. Furthermore, VIB (previously the Banking Subsidiaries) is not subject to foreign currency exchange rate risk or commodity price risk.

At ~~June~~September 30, 2001 the Company had adequate liquidity to meet its ~~anticipated~~ anticipated funding needs.

In regards to the potential California energy crisis, the Company maintains contingency plans in the normal course of business designed to be deployed in the event of various potential business interruptions such as power and telecommunications. The Company has an established Business Resumption Plan in coordination with its Disaster Recovery Plan which addresses any potential failures due to energy interruptions. The Company has approximately 40% of its market area within the Imperial Irrigation District, which will not be subject to rolling blackouts, and anticipates that any energy shortages in other areas will have a minimal effect on the operations of its branches.

INFLATION

The impact of inflation on a financial institution differs significantly from that exerted on an industrial company, primarily because its assets and liabilities consist largely of monetary items. The relatively low ratio of fixed assets to total assets of 1.2508% at ~~June~~September 30, ~~2000~~2001 reduces the ~~potential~~ potential for inflated earnings resulting from understated depreciation changes. However, financial institutions are affected by inflation’s impact on non-interest expenses, such as salaries and occupancy expense, and to some extent, by the inflative impact on interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Information in response to this item is included in ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Information in response to this item is included in ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

To the best of the Company’s knowledge, there are no pending legal proceedings to which the Company is a party and which may have a materially adverse effect upon the Company’s property or business.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

OnNot ~~April 25, 2001, the shareholders of the Company held their 2001 Annual Meeting~~Applicable. ~~At the Annual Meeting the following directors were elected to~~ ~~two-year terms:~~

	Votes For		Votes Withheld
Thomas S. Kelly		9,797,431		305,220
Dennis L. Kern		9,800,948		301,703
Edward McGrew		9,798,393		304,258
Pete J. Penner		9,796,455		306,196

The following directors’ terms continued after the Annual Meeting and expire in 2002:

R. Stephen Ellison Richard D. Foss Ronald A. (Rusty) Pederson Alice Helen Lowery Westerfield

The shareholders also voted to readopt Article VII of the Company’s Articles of Incorporation, which provides for fair price protection of shareholders.

The Annual Meeting was adjourned and reconvened on June 7, 2001. At the reconvened Annual Meeting the shareholders voted to reapprove Article V(b), dealing with the range of directors, and Article VII(h), dealing with the classification of the board of directors. The votes on these three proposals were as follows:

							Broker
	For		Against		Abstain		Non Votes
Article V(b) — Range of Directors		7,793,474		572,072		161,220		2,143,023
Article VII — Fair Price Protection		9,402,880		583,315		116,456		—
Article VIII(h) — Classified Board		7,498,589		870,070		158,107		2,143,023

ITEM 5. OTHER INFORMATION

Not Applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

~~Not~~The ~~Applicable.~~following exhibit is filed as a part of this report:

(a) Current Reports on Form 8-K:

~~During the quarter ended June 30, 2001 the Company filed the following~~ (b) Current ~~Report~~Reports on Form 8-K:

Description		Date of Report
Consolidation of Banking Subsidiaries		May 24, 2001


	During the quarter ended September 30, 2001 the Company filed the following Current Reports on Form 8-K:


Description		Date of Report

Preferred Shares Rights Agreement		August 14, 2001
Lenders Services Acquisition Corp Investment		September 14, 2001

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VIB CORP
Date: August 3, 2001
	/s/	Dennis L. Kern
		Dennis L. Kern, President and Chief Executive Officer
	/s/	Harry G. Gooding, III
		Harry G. Gooding, III, Executive Vice President and Chief Financial Officer

VIB CORP

Date: October 31, 2001

/s/ Dennis L. Kern

Dennis L. Kern,
President and Chief Executive Officer

/s/ Harry G. Gooding, III

Harry G. Gooding, III,
Executive Vice President and Chief Financial Officer

Regulation S-K

Exhibit No.

Description

Articles of Incorporation of VIB Corp as amended September 27,2001

Filing Compare · VIB CORP