##### Table of Contents



FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

(Mark One)

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

For the quarterly period ended September 30, 2002.

|      |  |                                                                                          
|----- |  | -----------------------------------------------------------------------------------------
|[   ] |  | 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

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(Exact name of registrant as specified in its charter)


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

1498 Main Street, El Centro, California 92243

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(Address of Principal Executive Offices)


(760) 337-3200

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(Registrants Telephone Number, Including Area Code)




---

(Former Name, Former Address and Former Fiscal Year, it 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: 13,682,781 shares as of
November 7, 2002.

1



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TABLE OF CONTENTS



|                             |                                                                                              |                                                           |  |  |  |  |  | 
|---------------------------- | -------------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | ITEM 1. FINANCIAL STATEMENTS                                                                
|                             |                                                                                              | Consolidated Statements of Financial Condition           
|                             |                                                                                              | Consolidated Statements of Financial Condition           
|                             |                                                                                              | Consolidated Statements of Income                        
|                             |                                                                                              | Consolidated Statement of Changes in Shareholders Equity
|                             |                                                                                              | Consolidated Statements of Cash Flows (Unaudited)        
|                             |                                                                                              | 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                           
|                             | ITEM 4. CONTROLS AND PROCEDURES                                                             
|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                  



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##### Table of Contents






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 September 30, 2002 have been prepared
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 September 30, 2002 have been
made. The results of operations for the period ended September 30, 2002 are
not necessarily indicative of the results that may be expected for the full
year.

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##### Table of Contents



VIB CORP AND SUBSIDIARIES




Consolidated Statements of Financial Condition


September 30, 2002 and December 31, 2001
(Unaudited)


|                                                          |                          |                                 |               |               |             |              |               |             |             | 
|--------------------------------------------------------- | ------------------------ | ------------------------------- | ------------- | ------------- | ----------- | ------------ | ------------- | ----------- | ----------- | 
|                                                          |                          |                                 |               | September 30, |             | December 31,
|                                                          |                          |                                 |               | 2002          |             | 2001        
|                                                          |                          |                                 |               |               |             |             
|ASSETS                                                    |                          |                                 |               |               |             |              |               |            
|Cash and due from banks                                   |                          | $                               | 43,451,188    |               |             | $            | 57,164,524    |            
|Federal funds sold                                        |                          |                                 |              |               |             |              | 1,500,000     |            
|                                                          |                          |                                 |               |               |             |              |               |            
|                                                          |                          | Total cash and cash equivalents |               |               | 43,451,188  |              |               |             | 58,664,524  | 
|Interest bearing deposits                                 |                          |                                 | 39,310        |               |             |              | 648,035       |            
|Securities available for sale (note B)                    |                          |                                 | 303,082,746   |               |             |              | 194,471,496   |            
|Federal Home Loan and Federal Reserve Bank stock, at cost |                          |                                 | 13,897,950    |               |             |              | 11,140,250    |            
|Loans: (note C)                                           |                          |                                 |               |               |             |              |               |            
|                                                          | Commercial               |                                 |               | 84,158,851    |             |              |               | 84,744,363  |            
|                                                          | Agricultural             |                                 |               | 35,929,733    |             |              |               | 53,287,734  |            
|                                                          | Real estate-construction |                                 |               | 208,401,384   |             |              |               | 164,862,160 |            
|                                                          | Real estate-other        |                                 |               | 509,352,446   |             |              |               | 506,505,603 |            
|                                                          | Consumer                 |                                 |               | 25,788,786    |             |              |               | 32,520,842  |            
|                                                          |                          |                                 |               |               |             |              |               |            
|                                                          |                          | Total Loans                     |               |               | 863,631,200 |              |               |             | 841,920,702 | 
|Net deferred loan fees                                    |                          |                                 | (4,233,057    | )             |             |              | (4,146,246    | )          
|Allowance for credit losses                               |                          |                                 | (10,242,260   | )             |             |              | (9,344,248    | )          
|                                                          |                          |                                 |               |               |             |              |               |            
|                                                          |                          | Net Loans                       |               |               | 849,155,883 |              |               |             | 828,430,208 | 
|Premises and equipment                                    |                          |                                 | 11,067,669    |               |             |              | 12,310,908    |            
|Other real estate owned                                   |                          |                                 | 1,596,562     |               |             |              | 3,138,697     |            
|Cash surrender life insurance                             |                          |                                 | 31,527,857    |               |             |              | 22,581,441    |            
|Deferred tax asset                                        |                          |                                 | 5,371,013     |               |             |              | 7,338,000     |            
|Goodwill and intangible assets                            |                          |                                 | 16,654,851    |               |             |              | 17,149,444    |            
|Accrued interest and other assets                         |                          |                                 | 13,642,292    |               |             |              | 12,363,751    |            
|                                                          |                          |                                 |               |               |             |              |               |            
|TOTAL ASSETS                                              |                          | $                               | 1,289,487,321 |               |             | $            | 1,168,236,754 |            

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

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##### Table of Contents



VIB CORP AND SUBSIDIARIES




Consolidated Statements of Financial Condition


September 30, 2002 and December 31, 2001
(Unaudited)


|                                                                                                                                                |                                                                                                                              |                            |               |               |               |              |               |             |               | 
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------- | ------------- | ------------- | ------------ | ------------- | ----------- | ------------- | 
|                                                                                                                                                |                                                                                                                              |                            |               | September 30, |               | December 31,
|                                                                                                                                                |                                                                                                                              |                            |               | 2002          |               | 2001        
|                                                                                                                                                |                                                                                                                              |                            |               |               |               |             
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                            |                                                                                                                              |                            |               |               |               |              |               |            
|Deposits                                                                                                                                        |                                                                                                                              |                            |               |               |               |              |               |            
|                                                                                                                                                | Noninterest-bearing demand                                                                                                   |                            | $             | 238,984,620   |               |              | $             | 239,820,321 |              
|                                                                                                                                                | Money Market and NOW                                                                                                         |                            |               | 213,118,750   |               |              |               | 205,078,944 |              
|                                                                                                                                                | Savings                                                                                                                      |                            |               | 101,352,370   |               |              |               | 63,806,829  |              
|                                                                                                                                                | Time deposits under $100,000                                                                                                 |                            |               | 190,197,631   |               |              |               | 182,953,344 |              
|                                                                                                                                                | Time deposits $100,000 and over                                                                                              |                            |               | 234,188,683   |               |              |               | 193,270,400 |              
|                                                                                                                                                |                                                                                                                              |                            |               |               |               |              |               |            
|                                                                                                                                                |                                                                                                                              | Total Deposits             |               |               | 977,842,054   |              |               |             | 884,929,838   | 
|Federal Home Loan Bank advances                                                                                                                 |                                                                                                                              |                            | 168,658,923   |               |               |              | 156,218,358   |            
|Capital lease obligation                                                                                                                        |                                                                                                                              |                            | 2,987,154     |               |               |              | 2,976,966     |            
|Company-obligated mandatorily redeemable preferred
securities of subsidiary trusts holding solely junior
subordinated debentures of the Company |                                                                                                                              |                            | 33,290,400    |               |               |              | 33,360,672    |            
|Accrued interest and other liabilities                                                                                                          |                                                                                                                              |                            | 9,723,027     |               |               |              | 9,113,431     |            
|                                                                                                                                                |                                                                                                                              |                            |               |               |               |              |               |            
|                                                                                                                                                |                                                                                                                              | Total Liabilities          |               |               | 1,192,501,558 |              |               |             | 1,086,599,265 | 
|Shareholders Equity                                                                                                                            |                                                                                                                              |                            |               |               |               |              |               |            
|                                                                                                                                                | Preferred stock, no par value;
10,000,000 shares authorized;
Issued and outstanding: None                                    |                            |               |              |               |              |               |            |              
|                                                                                                                                                | Common stock, no par value,
125,000,000 shares authorized;
Issued and outstanding: 13,597,110 in 2002
and 13,038,488 in 2001 |                            |               | 75,779,853    |               |              |               | 69,655,705  |              
|                                                                                                                                                | Retained Earnings                                                                                                            |                            |               | 17,466,898    |               |              |               | 11,808,477  |              
|                                                                                                                                                | Accumulated other comprehensive
income, net of tax of $2,598,296 in
2002 and $120,433 in 2001                                |                            |               | 3,739,012     |               |              |               | 173,307     |              
|                                                                                                                                                |                                                                                                                              |                            |               |               |               |              |               |            
|                                                                                                                                                |                                                                                                                              | Total Stockholders Equity |               |               | 96,985,763    |              |               |             | 81,637,489    | 
|                                                                                                                                                |                                                                                                                              |                            |               |               |               |              |               |            
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                      |                                                                                                                              | $                          | 1,289,487,321 |               |               | $            | 1,168,236,754 |            

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

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VIB CORP AND SUBSIDIARIES




Consolidated Statements of Income


(Unaudited)


|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |            | 
|----------------------------------------------------- | --------------------------------------------------- | - | ------------------- | ---------- | ------------------ | - | ------------- | ---------- | ------------- | - | ---------- | ---------- |  | - | ---------- | ---------- | 
|                                                      |                                                     |   | For the Three Month |            | For the Nine Month
|                                                      |                                                     |   | Period Ended        |            | Period Ended      
|                                                      |                                                     |   | September 30,       |            | September 30,      |   | September 30, |            | September 30,
|                                                      |                                                     |   | 2002                |            | 2001               |   | 2002          |            | 2001         
|                                                      |                                                     |   |                     |            |                    |   |               |            |              
|Interest Income:                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|                                                      | Interest and Fees on Loans                          |   | $                   | 16,474,377 |                    |   | $             | 18,039,799 |               |   | $          | 48,653,481 |  |   | $          | 56,776,312 | 
|                                                      | Interest on Investment Securities-Taxable           |   |                     | 3,831,209  |                    |   |               | 1,840,170  |               |   |            | 9,203,012  |  |   |            | 3,415,964  | 
|                                                      | Interest on Investment Securities-Nontaxable        |   |                     | 401,153    |                    |   |               | 423,198    |               |   |            | 1,195,262  |  |   |            | 1,653,525  | 
|                                                      | Other Interest Income                               |   |                     | 811        |                    |   |               | 13,198     |               |   |            | 13,406     |  |   |            | 190,076    | 
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Total Interest Income                                 |                                                     |   | 20,707,550          |            |                    |   | 20,316,365    |            |               |   | 59,065,161 |            |  |   | 64,035,877 |           
|Interest Expense:                                     |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|                                                      | Interest on Money Market and NOW                    |   |                     | 846,164    |                    |   |               | 1,019,600  |               |   |            | 2,353,348  |  |   |            | 3,716,924  | 
|                                                      | Interest on Savings Deposits                        |   |                     | 275,086    |                    |   |               | 175,787    |               |   |            | 562,059    |  |   |            | 610,325    | 
|                                                      | Interest on Time Deposits                           |   |                     | 3,138,253  |                    |   |               | 4,931,592  |               |   |            | 9,486,710  |  |   |            | 17,414,182 | 
|                                                      | Interest on Trust Preferred Securities              |   |                     | 666,395    |                    |   |               | 809,594    |               |   |            | 2,047,071  |  |   |            | 2,430,459  | 
|                                                      | Interest on Other Borrowings                        |   |                     | 2,061,354  |                    |   |               | 1,212,163  |               |   |            | 5,366,356  |  |   |            | 3,682,270  | 
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Total Interest Expense                                |                                                     |   | 6,987,252           |            |                    |   | 8,148,736     |            |               |   | 19,815,544 |            |  |   | 27,854,160 |           
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Net Interest Income                                   |                                                     |   | 13,720,298          |            |                    |   | 12,167,629    |            |               |   | 39,249,617 |            |  |   | 36,181,717 |           
|Provision for Credit Losses                           |                                                     |   | 624,999             |            |                    |   | 750,000       |            |               |   | 1,874,997  |            |  |   | 2,250,000  |           
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Net Interest Income after Provision for Credit Losses |                                                     |   | 13,095,299          |            |                    |   | 11,417,629    |            |               |   | 37,374,620 |            |  |   | 33,931,717 |           
|Non-interest Income:                                  |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|                                                      | Service Charges and Fees                            |   |                     | 1,980,299  |                    |   |               | 2,063,053  |               |   |            | 5,796,674  |  |   |            | 5,397,812  | 
|                                                      | Gain on Sale of Loans and Servicing Fees            |   |                     | 65,414     |                    |   |               | 160,192    |               |   |            | 769,111    |  |   |            | 745,630    | 
|                                                      | Gain on Sale of Securities                          |   |                     | 13,415     |                    |   |               | 1,539      |               |   |            | 43,492     |  |   |            | 1,474,217  | 
|                                                      | Dividends on Cash Surrender Value
of Life Insurance |   |                     | 210,349    |                    |   |               | 343,668    |               |   |            | 898,733    |  |   |            | 1,031,004  | 
|                                                      | Other Income                                        |   |                     | 64,009     |                    |   |               | 78,884     |               |   |            | 364,506    |  |   |            | 81,373     | 
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Total Non-interest Income                             |                                                     |   | 2,333,486           |            |                    |   | 2,647,336     |            |               |   | 7,872,516  |            |  |   | 8,730,036  |           
|Non-interest Expense:                                 |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|                                                      | Salaries and Employee Benefits                      |   |                     | 5,171,069  |                    |   |               | 5,041,007  |               |   |            | 14,827,114 |  |   |            | 15,989,998 | 
|                                                      | Occupancy Expenses                                  |   |                     | 992,763    |                    |   |               | 930,923    |               |   |            | 2,757,010  |  |   |            | 2,670,540  | 
|                                                      | Furniture and Equipment                             |   |                     | 830,588    |                    |   |               | 965,879    |               |   |            | 2,502,689  |  |   |            | 2,722,398  | 
|                                                      | Other Expenses (note D)                             |   |                     | 3,658,311  |                    |   |               | 3,739,231  |               |   |            | 10,273,008 |  |   |            | 11,082,733 | 
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Total Non-interest Expense                            |                                                     |   | 10,652,731          |            |                    |   | 10,677,040    |            |               |   | 30,359,821 |            |  |   | 32,465,669 |           
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Income Before Income Taxes                            |                                                     |   | 4,776,054           |            |                    |   | 3,387,925     |            |               |   | 14,887,315 |            |  |   | 10,196,084 |           
|Income Taxes                                          |                                                     |   | 1,051,000           |            |                    |   | 1,151,000     |            |               |   | 4,515,641  |            |  |   | 3,554,300  |           
|                                                      |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|Net Income                                            |                                                     | $ | 3,725,054           |            |                    | $ | 2,236,925     |            |               | $ | 10,371,674 |            |  | $ | 6,641,784  |           
|Per Share Data: (note E)                              |                                                     |   |                     |            |                    |   |               |            |               |   |            |            |  |   |            |           
|                                                      | Net Income  Basic                                  |   | $                   | 0.27       |                    |   | $             | 0.17       |               |   | $          | 0.77       |  |   | $          | 0.50       | 
|                                                      | Net Income  Diluted                                |   | $                   | 0.26       |                    |   | $             | 0.17       |               |   | $          | 0.75       |  |   | $          | 0.49       | 

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

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VIB CORP AND SUBSIDIARIES




Consolidated Statement of Changes in Shareholders Equity


|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |            |           |            |  
|----------------------------- | -------------------------------- | ---------------------------------------------------------- | -------------------------------------------------------------------------------------------- |  | ------------- | - | ---------- |  | -------- | - | ---------- | ---------- | ------------- | - | --------- | - | ----------- | ---------- | ---------- | ---------- | --------- | ---------- | -
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   | Accumulated |            |            |            |          
|                              |                                  |                                                            |                                                                                              |  | Common Shares |   |            |  |          |   | Other      |            |               |   |          
|                              |                                  |                                                            |                                                                                              |  | Number of     |   |            |  |          |   | Retained   |            | Comprehensive |   |           |   |            
|                              |                                  |                                                            |                                                                                              |  | Shares        |   | Amount     |  | Earnings |   | Income     |            | Total        
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |              
|Balance January 1, 2001       |                                  |                                                            | 12,168,644                                                                                   |  |               | $ | 62,283,298 |  |          | $ | 9,173,494  |            |               | $ | (606,003  | ) |             | $          | 70,850,789 |           
|Comprehensive Income          |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|                              | Net Income                       |                                                            |                                                                                              |  |               |   |            |  |          |   |            | 9,222,088  |               |   |           |   |             |            |            | 9,222,088  |          
|                              | Other comprehensive income       |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |            |          
|                              |                                  | Unrealized gain on securities,
net of taxes of $1,320,756  |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   | 1,900,600   |            |            |            | 1,900,600 |           
|                              |                                  |                                                            | Less reclassification
adjustments
for gains included in
net income, net of taxes of $779,201 |  |               |   |            |  |          |   |            |            |               |   |           |   |             | (1,121,290 | )          |            |           | (1,121,290 | )
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|Total Comprehensive income    |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            | 10,001,398 |           
|Cash dividends                |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   | (23,589    | )          |               |   |           |   |             |            | (23,589    | )         
|Stock dividends               |                                  |                                                            | 744,188                                                                                      |  |               |   | 6,563,516  |  |          |   | (6,563,516 | )          |               |   |           |   |             |            |           |           
|Exercise of stock options     |                                  |                                                            | 125,656                                                                                      |  |               |   | 808,891    |  |          |   |            |            |               |   |           |   |             |            | 808,891    |           
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|Balance at December 31, 2001  |                                  |                                                            | 13,038,488                                                                                   |  |               |   | 69,655,705 |  |          |   | 11,808,477 |            |               |   | 173,307   |   |             |            | 81,637,489 |           
|Comprehensive income          |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|                              | Net Income                       |                                                            |                                                                                              |  |               |   |            |  |          |   |            | 10,371,674 |               |   |           |   |             |            |            | 10,371,674 |          
|                              | Other comprehensive income       |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |            |          
|                              |                                  | Unrealized gains on securities, net
of taxes of $2,495,694 |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   | 3,591,365   |            |            |            | 3,591,365 |           
|                              |                                  |                                                            | Less reclassification
adjustments
for gains included in
net income,
net of taxes of $17,832  |  |               |   |            |  |          |   |            |            |               |   |           |   |             | (25,660    | )          |            |           | (25,660    | )
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|                              | Total Other comprehensive income |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            | 3,565,705  |          
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|Total Comprehensive income    |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            | 13,937,379 |           
|Cash dividends                |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   | (17,268    | )          |               |   |           |   |             |            | (17,268    | )         
|Stock dividends               |                                  |                                                            | 392,838                                                                                      |  |               |   | 4,695,985  |  |          |   | (4,695,985 | )          |               |   |           |   |             |            |           |           
|Exercise of stock options     |                                  |                                                            | 165,784                                                                                      |  |               |   | 1,428,163  |  |          |   |            |            |               |   |           |   |             |            | 1,428,163  |           
|                              |                                  |                                                            |                                                                                              |  |               |   |            |  |          |   |            |            |               |   |           |   |             |            |            |           
|Balance at September 30, 2002 |                                  |                                                            | 13,597,110                                                                                   |  |               | $ | 75,779,853 |  |          | $ | 17,466,898 |            |               | $ | 3,739,012 |   |             | $          | 96,985,763 |           

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

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##### Table of Contents



VIB CORP AND SUBSIDIARIES




Consolidated Statements of Cash Flows (Unaudited)


|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |        |             |              |             |  
|--------------------------------------------------------------------------------- | ---------------------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------- | ----------------------------------------- | ----------- | ---------------------------------------------- | ------------ | ------ | ----------- | ------------ | ----------- | -
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             | For the Nine-Month Periods Ended September 30,
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             | 2002                                           |              | 2001  
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|Cash flow from operating activities:                                              |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|Net income                                                                        |                                                                  | $                                                                     | 10,371,674                                        |                                           |             | $                                              | 6,641,784    |       
|Adjustments to reconcile net income to net
cash provided by operating activities: |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|                                                                                  |                                                                  | Depreciation and amortization                                         |                                                   |                                           | 2,582,297   |                                                |              |        | 3,192,526   |             
|                                                                                  |                                                                  | Deferred income taxes                                                 |                                                   |                                           | (510,877    | )                                              |              |        | (279,390    | )           
|                                                                                  |                                                                  | Provision for credit losses                                           |                                                   |                                           | 1,874,997   |                                                |              |        | 2,250,000   |             
|                                                                                  |                                                                  | Originations of loans held for sale                                   |                                                   |                                           | (12,337,348 | )                                              |              |        | (33,838,124 | )           
|                                                                                  |                                                                  | Proceeds from sale of loans                                           |                                                   |                                           | 6,816,822   |                                                |              |        | 33,852,399  |             
|                                                                                  |                                                                  | Net gain on loan sales                                                |                                                   |                                           | (572,552    | )                                              |              |        | (477,858    | )           
|                                                                                  |                                                                  | Loss on sale of other real estate owned                               |                                                   |                                           | 36,444      |                                                |              |        | 54,574      |             
|                                                                                  |                                                                  | Net increase in cash surrender value of life insurance                |                                                   |                                           | (946,416    | )                                              |              |        | (1,031,688  | )           
|                                                                                  |                                                                  | Net realized gains on available for sale securities                   |                                                   |                                           | (43,492     | )                                              |              |        | (1,474,217  | )           
|                                                                                  |                                                                  | Net amortization of premium/discount on available
for sale securities |                                                   |                                           | 1,117,224   |                                                |              |        | 301,409     |             
|                                                                                  |                                                                  | Net change in accrued interest, other assets,
and other liabilities   |                                                   |                                           | (688,945    | )                                              |              |        | 58,114      |             
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|                                                                                  |                                                                  |                                                                       |                                                   | Net cash provided by operating activities |             |                                                | 7,719,928    |        |             |              | 9,249,529   |  
|                                                                                  |                                                                  | Cash flow from investing activities                                   |                                                   |                                           |             |                                                |              |        |             |             
|                                                                                  |                                                                  |                                                                       | Purchase of investment securities                 |                                           |             | (207,183,308                                   | )            |        |             | (159,995,122 | )          
|                                                                                  |                                                                  |                                                                       | Proceeds from sales of other real estate owned    |                                           |             | 1,770,448                                      |              |        |             | 2,317,995    |            
|                                                                                  |                                                                  |                                                                       | Proceeds from sales of investment securities      |                                           |             | 8,514,068                                      |              |        |             | 51,002,296   |            
|                                                                                  |                                                                  |                                                                       | Proceeds from maturities of investment securities |                                           |             | 92,270,127                                     |              |        |             | 92,256,000   |            
|                                                                                  |                                                                  |                                                                       | Purchase of Cash Surrender Value Life Insurance   |                                           |             | (8,000,000                                     | )            |        |             |             |            
|                                                                                  |                                                                  |                                                                       | Net change in loans                               |                                           |             | (16,772,351                                    | )            |        |             | (25,866,769  | )          
|                                                                                  |                                                                  |                                                                       | Premises and equipment expenditures               |                                           |             | (844,465                                       | )            |        |             | (1,024,155   | )          
|                                                                                  |                                                                  |                                                                       | Net decrease in interest bearing deposits         |                                           |             | 608,725                                        |              |        |             | 1,142,605    |            
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|                                                                                  |                                                                  |                                                                       |                                                   | Net cash used by investing activities     |             |                                                | (129,636,756 | )      |             |              | (40,167,150 | )
|                                                                                  |                                                                  | Cash flow from financing activities                                   |                                                   |                                           |             |                                                |              |        |             |             
|                                                                                  |                                                                  |                                                                       | Net increase in demand deposits and savings       |                                           |             | 44,749,646                                     |              |        |             | 4,041,836    |            
|                                                                                  |                                                                  |                                                                       | Net increase/(decrease) in time deposits          |                                           |             | 48,162,570                                     |              |        |             | (23,010,188  | )          
|                                                                                  |                                                                  |                                                                       | Net change in capitalized lease obligations       |                                           |             | 10,188                                         |              |        |             | 17,775       |            
|                                                                                  |                                                                  |                                                                       | Net change in fed funds purchased                 |                                           |             |                                               |              |        |             | 40,150,000   |            
|                                                                                  |                                                                  |                                                                       | Net change in other borrowings                    |                                           |             | 12,370,293                                     |              |        |             | (750,000     | )          
|                                                                                  |                                                                  |                                                                       | Payments for dividends                            |                                           |             | (17,268                                        | )            |        |             | (10,693      | )          
|                                                                                  |                                                                  |                                                                       | Proceeds from exercise of stock options           |                                           |             | 1,428,163                                      |              |        |             | 624,378      |            
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|                                                                                  |                                                                  |                                                                       |                                                   | Net cash provided by financing activities |             |                                                | 106,703,592  |        |             |              | 21,063,108  |  
|                                                                                  |                                                                  |                                                                       |                                                   | Net change in cash and cash equivalents   |             | $                                              | (15,213,336  | )      |             | $            | (9,854,513  | )
|                                                                                  |                                                                  |                                                                       |                                                   |                                           |             |                                                |              |       
|                                                                                  | Cash and cash equivalents                                        |                                                                       |                                                   |                                           |             |                                                |              |        |            
|                                                                                  |                                                                  |                                                                       | Beginning of period                               |                                           | $           | 58,664,524                                     |              |        | $           | 51,604,079   |            
|                                                                                  |                                                                  |                                                                       | End of period                                     |                                           | $           | 43,451,188                                     |              |        | $           | 41,749,566   |            
|                                                                                  | Supplemental disclosure of cash flow information: (in thousands) |                                                                       |                                                   |                                           |             |                                                |              |        |            
|                                                                                  | Cash paid for interest expense                                   |                                                                       | $                                                 | 19,489                                    |             |                                                | $            | 27,705 |            
|                                                                                  | Cash paid for income taxes                                       |                                                                       | $                                                 | 6,472                                     |             |                                                | $            | 3,342  |            

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

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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 2001 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 2001 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, Valley Capital Trust II, VIBC Services Company and Valley
Independent Banks wholly owned subsidiary, VIB Investment Trust. All
significant intercompany 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 September 30, 2002 had a
net unrealized gain of approximately $6,337,000, as compared with a net
unrealized gain of approximately $294,000 at December 31, 2001, an increase
during the nine months beginning January 1, 2002 of $6,043,000. The change for
the period is attributable to the recomposition of the portfolio using a
leveraging strategy to enhance earnings.

Investment Securities

|                               |                                       |                      |                    |         |  |                         |                  |            |  |   |     |     |  |   |         |         | 
|------------------------------ | ------------------------------------- | -------------------- | ------------------ | ------- |  | ----------------------- | ---------------- | ---------- |  | - | --- | --- |  | - | ------- | ------- | 
|                               |                                       |                      | September 30, 2002
|                               |                                       |                      |                   
|                               |                                       |                      |                    |         |  |                         | Gross Unrealized |            |  |   |     |     |  |   |        
|($ in
000s)                   |                                       | Gross Amortized Cost |                    | Gains   |  | Gross Unrealized Losses |                  | Fair Value
|                               |                                       |                      |                    |         |  |                         |                  |           
|Available-for Sale Securities: |                                       |                      |                    |         |  |                         |                  |            |  |   |     |     |  |   |         |        
|                               | U.S. Treasury Securities              |                      | $                  | 503     |  |                         | $                |           |  |   | $   |    |  |   | $       | 503     | 
|                               | U.S. Government and Agency Securities |                      |                    | 37,053  |  |                         |                  | 479        |  |   |     | 6   |  |   |         | 37,526  | 
|                               | State and Political Subdivisions      |                      |                    | 38,497  |  |                         |                  | 1,047      |  |   |     | 15  |  |   |         | 39,529  | 
|                               | Mortgage-Backed Securities            |                      |                    | 215,189 |  |                         |                  | 4,776      |  |   |     | 13  |  |   |         | 219,952 | 
|                               | Other Equity                          |                      |                    | 5,503   |  |                         |                  | 176        |  |   |     | 106 |  |   |         | 5,573   | 
|                               |                                       |                      |                    |         |  |                         |                  |            |  |   |     |     |  |   |         |        
|                               |                                       | $                    | 296,745            |         |  | $                       | 6,478            |            |  | $ | 140 |     |  | $ | 303,083 |        

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|                               |                                       |                      |                   |                        |  |        |       |            |  |   |                  |     |  |   |         |        | 
|------------------------------ | ------------------------------------- | -------------------- | ----------------- | ---------------------- |  | ------ | ----- | ---------- |  | - | ---------------- | --- |  | - | ------- | ------ | 
|                               |                                       |                      | December 31, 2001
|                               |                                       |                      |                  
|                               |                                       |                      |                   |                        |  |        |       |            |  |   | Gross Unrealized |     |  |   |        
|($ in 000s)                   |                                       | Gross Amortized Cost |                   | Gross Unrealized Gains |  | Losses |       | Fair Value
|                               |                                       |                      |                   |                        |  |        |       |           
|Available-for Sale Securities: |                                       |                      |                   |                        |  |        |       |            |  |   |                  |     |  |   |         |       
|                               | U.S. Treasury Securities              |                      | $                 | 22,252                 |  |        | $     | 2          |  |   | $                | 13  |  |   | $       | 22,241 | 
|                               | U.S. Government and Agency Securities |                      |                   | 30,482                 |  |        |       | 96         |  |   |                  | 8   |  |   |         | 30,570 | 
|                               | State and Political Subdivisions      |                      |                   | 39,471                 |  |        |       | 308        |  |   |                  | 663 |  |   |         | 39,116 | 
|                               | Mortgage-Backed Securities            |                      |                   | 96,571                 |  |        |       | 721        |  |   |                  | 71  |  |   |         | 97,221 | 
|                               | Other Equity                          |                      |                   | 5,402                  |  |        |       | 55         |  |   |                  | 134 |  |   |         | 5,323  | 
|                               |                                       |                      |                   |                        |  |        |       |            |  |   |                  |     |  |   |         |       
|                               |                                       | $                    | 194,178           |                        |  | $      | 1,182 |            |  | $ | 889              |     |  | $ | 194,471 |       

Investment securities carried at approximately $297,301,000 and
$186,576,000, at September 30, 2002 and December 31,2001, respectively, were
pledged to secure public deposits, bank advances and other purposes as required
by law.

(C)  Loans

The Companys loan portfolio consists primarily of loans to borrowers
within southern and central California. Although the Company seeks to avoid
concentrations of loans to a single industry or based upon 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 September 30,
2002 and December 31, 2001 the Company was servicing approximately $76,271,000
and $80,028,000, respectively, in loans previously sold.

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

|                                              |  |                    |        |                     |  |   |        |  
|--------------------------------------------- |  | ------------------ | ------ | ------------------- |  | - | ------ | -
|                                              |  | Nine months ended  |        | Twelve months ended
|($ In 000s)                                  |  | September 30, 2002 |        | December 31,2001   
|                                              |  |                    |        |                    
|Balance at beginning of year                  |  | $                  | 9,344  |                     |  | $ | 8,298  |  
|Additions to the allowance charged to expense |  |                    | 1,875  |                     |  |   | 3,000  |  
|Recoveries on loans charged off               |  |                    | 102    |                     |  |   | 224    |  
|Loans charged off                             |  |                    | (1,079 | )                   |  |   | (2,178 | )
|                                              |  |                    |        |                     |  |   |        |  
|Balance at end of period                      |  | $                  | 10,242 |                     |  | $ | 9,344  |  

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A summary of nonperforming loans and assets follows:

|                                                                |                            |                    |        |                  |  |   |        |        | 
|--------------------------------------------------------------- | -------------------------- | ------------------ | ------ | ---------------- |  | - | ------ | ------ | 
|($ in
000s)                                                    |                            | September 30, 2002 |        | December 31,2001
|                                                                |                            |                    |        |                 
|Non-accrual loans                                               |                            | $                  | 14,542 |                  |  | $ | 14,095 |       
|Loans 90 days past due and still accruing                       |                            |                    | 31     |                  |  |   |       |       
|                                                                |                            |                    |        |                  |  |   |        |       
|                                                                | Total nonperforming loans  |                    |        | 14,573           |  |   |        | 14,095 | 
|Other Real Estate Owned                                         |                            |                    | 1,597  |                  |  |   | 3,139  |       
|                                                                |                            |                    |        |                  |  |   |        |       
|                                                                | Total nonperforming assets |                    | $      | 16,170           |  |   | $      | 17,234 | 
|Nonperforming loans to total ending loans                       |                            |                    | 1.72   | %                |  |   | 1.70   | %     
|Nonperforming assets to total loans and
Other Real Estate Owned |                            |                    | 1.90   | %                |  |   | 2.07   | %     

(D)  Other Expenses

Other expenses for the periods indicated are as follows:

|                            |                      |                    |       |                    |  |   |       |        | 
|--------------------------- | -------------------- | ------------------ | ----- | ------------------ |  | - | ----- | ------ | 
|($ in
000s)                |                      | September 30, 2002 |       | September 30, 2001
|                            |                      |                    |       |                   
|Data Processing             |                      | $                  | 2,300 |                    |  | $ | 2,184 |       
|Advertising                 |                      |                    | 486   |                    |  |   | 426   |       
|Legal and Professional      |                      |                    | 2,419 |                    |  |   | 2,416 |       
|Regulatory Assessments      |                      |                    | 116   |                    |  |   | 124   |       
|Insurance                   |                      |                    | 102   |                    |  |   | 90    |       
|Amortization of Intangibles |                      |                    | 495   |                    |  |   | 965   |       
|Office Expenses             |                      |                    | 1,699 |                    |  |   | 1,939 |       
|Promotion                   |                      |                    | 1,047 |                    |  |   | 1,321 |       
|Other                       |                      |                    | 1,609 |                    |  |   | 1,618 |       
|                            |                      |                    |       |                    |  |   |       |       
|                            | Total Other Expenses |                    | $     | 10,273             |  |   | $     | 11,083 | 

(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: 13,588,262
for the three months ended September 30, 2002 and 13,401,316 for the three
months ended September 30, 2001; 13,537,007 for the nine months ended September
30, 2002 and 13,366,766 for the nine months ended September 30, 2001.

Diluted earnings per share for the three- and nine-month periods ended
September 30, 2002 and 2001, are computed by dividing net earnings by the
weighted average common equivalent shares outstanding during the respective
periods as follows: 14,058,658 for the three months ended September 30, 2002
and 13,518,265 for the three months ended September 30, 2001; 13,914,541 for
the nine months ended September 30, 2002 and 13,443,047 for the nine months
ended September 30, 2001. Common share equivalents include dilutive common
stock option share equivalents determined by using the treasury stock method.

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(F)  Commitments and Contingencies

The Company is a party to financial instruments in the normal course of
business to meet financing needs of its customers and to reduce its own
exposure to fluctuating interest rates. These financial instruments include
commitments to make loans and standby letters of credit.

Exposure to credit loss in the event of nonperformance by the other party
to the financial instrument for commitments to make loans and standby letters
of credit is represented by the contractual amount of those instruments. The
Company uses the same credit policies in making commitments as it does for
loans reflected in the financial statements.

At September 30, 2002 and December 31, 2001, commitments to make loans
totaled $285.5 million and $288.7 million, and standby letters of credit
totaled $4.1 million and $1.6 million, respectively.

Since commitments to make loans may expire without being used, this amount
does not necessarily represent future cash commitments. Collateral obtained
upon exercise of the commitment is determined using managements credit
evaluation of the borrower and may include accounts receivable, inventory,
property, land and other items.

(G)  Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS 142). Under the new rules, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests in accordance with the new statement. Other
identifiable intangible assets, which include deposit-based intangibles, will
continue to be amortized over their useful lives and reviewed for impairment in
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
long-Lived Assets. Useful lives of amortizable intangible assets are
required to be reevaluated each reporting period with any changes in estimated
useful lives being accounted for prospectively over the revised remaining
useful life.

The Company adopted SFAS 142 on January 1, 2002. Upon adoption, the
Company no longer amortizes goodwill. The following table presents the effect
the adoption of SFAS 142 would have had on the period ended September 30, 2001
had SFAS 142 been applied retroactively:

|                                       |                       |      |                                  |      |                                 |      |       |      |  |   |        |     |  |   |       |     | 
|-------------------------------------- | --------------------- | ---- | -------------------------------- | ---- | ------------------------------- | ---- | ----- | ---- |  | - | ------ | --- |  | - | ----- | --- | 
|                                       |                       |      | Three Months ended September 30, |      | Nine months ended September 30,
|                                       |                       |      |                                  |      |                                
|($000s except for earnings per share) |                       | 2002 |                                  | 2001 |                                 | 2002 |       | 2001
|                                       |                       |      |                                  |      |                                 |      |       |     
|Net income                             |                       | $    | 3,725                            |      |                                 | $    | 2,237 |      |  | $ | 10,372 |     |  | $ | 6,642 |    
|Addback: Goodwill amortization         |                       |      |                                 |      |                                 |      | 202   |      |  |   |       |     |  |   | 606   |    
|                                       |                       |      |                                  |      |                                 |      |       |      |  |   |        |     |  |   |       |    
|Adjusted net income                    |                       | $    | 3,725                            |      |                                 | $    | 2,439 |      |  | $ | 10,372 |     |  | $ | 7,248 |    
|Basic earnings per share:              |                       |      |                                  |      |                                 |      |       |      |  |   |        |     |  |   |       |    
|                                       | Net income            |      | $                                | .27  |                                 |      | $     | .17  |  |   | $      | .77 |  |   | $     | .50 | 
|                                       | Goodwill amortization |      |                                  |     |                                 |      |       | .01  |  |   |        |    |  |   |       | .04 | 
|                                       |                       |      |                                  |      |                                 |      |       |      |  |   |        |     |  |   |       |    
|                                       | Adjusted net income   |      | $                                | .27  |                                 |      | $     | .18  |  |   | $      | .77 |  |   | $     | .54 | 
|Diluted earnings per share:            |                       |      |                                  |      |                                 |      |       |      |  |   |        |     |  |   |       |    
|                                       | Net income            |      | $                                | .26  |                                 |      | $     | .17  |  |   | $      | .75 |  |   | $     | .49 | 
|                                       | Goodwill amortization |      |                                  |     |                                 |      |       | .01  |  |   |        |    |  |   |       | .05 | 
|                                       |                       |      |                                  |      |                                 |      |       |      |  |   |        |     |  |   |       |    
|                                       | Adjusted net income   |      | $                                | .26  |                                 |      | $     | .18  |  |   | $      | .75 |  |   | $     | .54 | 

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The Companys initial test for impairment of goodwill as of December 31,
2001 has been performed utilizing both the market and cost approach and both
methods indicated no impairment of goodwill.

Amortizable intangible assets are to be reviewed for impairment in
accordance with SFAS No. 144. That is, if a triggering event occurs, the
recoverability of the intangible assets cost must be evaluated. Where the
carrying amount is not recoverable, the Company must test the carrying amount
of the intangible asset for impairment. Examples of triggering events are:



| | 1. |  | The asset market value decreases significantly.                         
| | -- |  | ------------------------------------------------------------------------
|
| | 2. |  | The use of the asset is significantly changed in extent or
manner.      
|
| | 3. |  | Legal factors or business climate changes adversely affect asset
value. 
|
| | 4. |  | Regulators adverse assessment or action.                               
|
| | 5. |  | Original expected costs are significantly exceeded.                     
|
| | 6. |  | A history of cash flow losses and continued asset losses are
forecasted.

As of September 30, 2002, there has been no triggering event that would
cause the Company to reevaluate the recoverability of its intangible assets.
During the quarter ending March 31, 2002, the Company reevaluated the remaining
useful lives of all previously recognized intangible assets and adjusted those
lives prospectively, where appropriate.

Other intangible assets at September 30, 2002 consisted of core deposit
intangibles with a net carrying value of $3,168,180. Accumulated amortization
through September 30, 2002 was $1,997,308. Amortization expense for the
periods ended September 30, 2002, and September 30, 2001 was $494,593 and
$358,570, respectively. Goodwill amortization for the period ended September
30, 2001 amounted to $ 606,000.

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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, 2001
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 or the Bank) 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 (Stockdale). 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 Stockdale merger was accounted for as a pooling of interests. The
Company issued 2,896,764 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.

Stockdale continued to operate under its federal stock savings bank
charter until May 24, 2001 at which time it was merged with and into VIB
pursuant to a Plan of Reorganization and Agreement of Merger entered into on
March 21, 2001.

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.

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In connection with the branch acquisition by Valley Independent Bank it
was anticipated that VIB would require additional capitalization. On February
5, 1999, the Company raised approximately $22.2 million in net proceeds from a
trust preferred securities offering in a private placement. The proceeds
were used to increase Valley Independent Banks capital by $8.5 million and the
balance was used for the acquisition of Kings River State Bank and general
corporate purposes. The proceeds to the Company are treated as Tier 1 capital
by the Company for regulatory purposes. The interest paid by the Company 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 trust preferred securities can be called
after February 5, 2009.

On September 7, 1999, VIB Corp, Kings River State Bank and Kings River
Bancorp, headquartered in Reedley, California, entered into an Agreement and
Plan of Reorganization pursuant to which Kings River State Bank would become a
wholly-owned subsidiary of VIB Corp and would continue to operate under its
separate California commercial bank charter. Upon consummation of the merger
on January 7, 2000, 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. The results of Kings River Bancorps
operations were included in those reported by the Company beginning January 10,
2000.

Kings River continued to operate under its California commercial bank
charter until May 24, 2001, at which time it was merged with and into VIB
pursuant to a Plan of Reorganization and Agreement of Merger entered into on
March 22, 2001.

In July, 2000, the Company raised approximately $9.6 million in net
proceeds from an offering of trust preferred securities at 11.695%, due July
19, 2030, in a private placement conducted as a part of a pooled offering. The
Company formed a wholly-owned New York common law trust subsidiary, VIBC
Capital Trust I (Trust I), to facilitate the transaction. The proceeds to
the Company are treated as Tier 2 capital for regulatory purposes. The
proceeds were used to increase VIBs capital by $8.5 million, with the balance
used for general corporate purposes. The interest will be deductible by the
Company. 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 trust preferred securities can be called
after July 19, 2010.

On December 28, 2000, the Company formed a wholly-owned subsidiary, VIBC
Services Company (VIBC Services), for the purpose of providing centralized
and consolidated support for the Company and its subsidiaries. This support
would include but is not limited to, management information services, retail
bank support, facilities and equipment management and courier service. VIBC
Services was initially capitalized with an infusion of $500,000 from the
Company. VIBC Services has been inactive since January 31, 2001.

On May 24, 2001 Stockdale and Kings River merged with and into VIB
pursuant to the terms of Plans of Reorganization and Agreements of Merger
dated March 21 and March 22, 2001. All of the former offices of Stockdale and
Kings River operate as branches of VIB;

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however, some continue to use the
Stockdale and Kings River names as DBAs. The merger is anticipated to provide
significant cost savings and improve operating efficiencies by removing layers
of regulatory reporting and operating expenses.

On August 14, 2001, pursuant to a Preferred Shares Rights Agreement (the
Rights Agreement) between the Company and U. S. Stock Transfer Corporation,
as Rights Agent, the Companys Board of Directors declared a dividend of one
right (a Right) to purchase one-thousandth share of the Companys Series A
Participating Preferred Stock (Series A Preferred) for each outstanding share
of the Companys no par value Common Stock. The dividend was paid on August
31, 2001, to shareholders of record as of the close of business on that date.
Each Right entitles the registered holder to purchase from the Company
one-thousandth of a share of Series A Preferred at an exercise price of $40.00,
subject to adjustment. However, if an acquiring party accumulates 15% or more
of the Companys voting stock without the Boards prior approval, each Right
enables its holder (other than the acquiring party) to purchase the Preferred
interest at 50% of the market price. Further, in the event the Company is
acquired in an unwanted merger or business combination, each Right enables the
holder to purchase shares of the acquiring entity at a similar discount. Under
certain circumstances, the Rights may be exchanged for common stock of the
Company. The Board may, in its sole discretion, redeem the Rights at any time
prior to such acquisitions for $.01 per Right. The Rights will expire on
August 14, 2011.

On September 14, 2001 the Company invested $2,000,000 in the Series A
Convertible Preferred Stock of Lenders Services Acquisition Corp. (LSAC),
representing an 22.5% interest in the total issuance of the Series A Preferred
Stock. LSAC is a newly organized Delaware corporation formed for the purpose
of acquiring all of the outstanding stock of Diversified Capital Holdings,
Inc., a California-based insurance holding company whose principal subsidiaries
are Northern Counties Title Insurance Company, a title insurance underwriter,
and South Coast Title Company, a title insurance agency. The Companys
decision to invest in LSAC was made to maintain and diversify sources of
non-interest income. The Series A Preferred Stock was issued by LSAC pursuant
to a private placement to financial institution holding companies. In addition
to the 811,500 shares of the Series A Preferred Stock outstanding, LSAC has
109,090 shares of Common Stock outstanding. The Series A Preferred Stock is
initially convertible into the Common on a one-for-one basis. On September 14,
2001, LSAC also consummated its acquisition of Diversified Capital Holdings,
Inc. LSAC has since changed its name to Diversified Holding Corporation and
formed AT Services, LLC (AT Services) to manage its trust deposits and the
trust deposits of its subsidiaries.

In November, 2001, the Company raised approximately $19.1 million in net
proceeds from an offering of floating rate 6% trust preferred securities in a
private placement conducted as a part of a pooled offering. The proceeds were
used to repurchase $19.2 million of the 9% trust preferred securities issued
in February, 1999, in connection with the Companys first trust preferred
offering, with the balance to be used for general corporate purposes. The
Company formed a wholly-owned Delaware business trust subsidiary, Valley
Capital Trust II (Trust II), to facilitate the transaction. The proceeds to
the Company will be treated as Tier 1 capital for regulatory purposes. The 9%
trust preferred securities issued in 1999 were repurchased at a discount.
They will not be retired; however, they will be eliminated for consolidated and
regulatory accounting purposes. As trust preferred securities, they were
treated as Tier 1 capital. The interest will be deductible and paid by the
Company. 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. These trust preferred securities will mature
concurrently on December 8, 2031; but can be called after December 8, 2006 or
earlier upon the occurrence of certain defined events.

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During April, 2002, VIB formed a Maryland real estate investment trust
(VIB Investment Trust) by contributing certain qualifying real estate assets
in exchange for one thousand (1,000) common and one thousand (1,000) preferred
shares of beneficial interest in VIB Investment Trust. The amount of
investment in VIB Investment Trust is dictated by the size of VIBs current
mortgage loan, mortgage-backed and mortgage related securities portfolios. VIB
Investment Trusts overriding objective will be to acquire, hold, finance, and
manage assets consisting of participation interests in residential mortgage
loans, commercial real estate loans, construction loans, and possible
mortgage-related securities.

The purpose for establishing VIB Investment Trust is to enable VIB to
readily gain access to capital markets and to reduce the expenses associated
with holding the assets contributed to VIB Investment Trust.

On July 30, 2002, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
Rabobank Nederland (Rabobank), a Netherlands based cooperative bank, and VIB
Corp entered into a definitive agreement pursuant to which the Company will
merge with and become a wholly-owned subsidiary of Rabobank. After the merger,
the Company will continue to operate under its current name and will retain its
subsidiaries.

Under the terms of the agreement, Rabobank will acquire 100% of VIB Corps
issued and outstanding shares of no par value Common Stock at $15.10 per share
in a cash transaction. The aggregate amount to be paid to VIB Corps
shareholders is estimated to amount to approximately $212.5 million and will be
funded from Rabobanks existing cash resources.

Subject to obtaining applicable regulatory and VIB Corp shareholder
approvals, the transaction is expected to be completed in the fourth quarter
2002 or early first quarter 2003.

During 2001 and 2002 the Company did not conduct any business other than
through VIB, Stockdale, Kings River and VIBC Services and as described above.
At year-end, the Company had total consolidated assets of $1,168 million. Upon
consummation of the Kings River and Stockdale mergers into VIB, the Company has
conducted its banking business only through VIB. Neither the Company nor VIB
earn revenues from sources outside of the United States.

Consolidated net income for the three months ended September 30, 2002 was
$3.7 million or $.26 per share diluted based upon average shares outstanding of
14,058,658. This compares with net income of $2.2 million or $.17 per share
fully diluted based upon the average shares outstanding of 13,518,265 for the
same period in 2001. Consolidated net income for the nine months ended
September 30, 2002, was $10.4 million or $.75 per share diluted based upon
average shares outstanding of 13,914,541. This compares with net income of
$6.6 million or $.49 per share fully diluted based upon the average shares
outstanding of 13,443,047 for the same period in 2001.

Total gross loans at September 30, 2002 were $859.4 million, which
represented an increase of $21.6 million or 2.6% from December 31, 2001. Since
September 30, 2001, total gross loans have increased $13.7 million or 1.6%.

On March 13, 2002, the Board of Directors approved a 3% stock dividend for
shareholders of record on May 24, 2002. The dividend was paid on June 14,
2002. All per share figures have been adjusted for this and previous stock
dividends.

The Companys Internet home page on the World Wide Web is:
www.vibcorp.com. VIB has a home page, located at: www.vibank.com.

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NET INTEREST INCOME

Average interest-earning assets totaled $1,123.6 million during the nine
months ended September 30, 2002, an increase of $123.7 million or 12.4%
compared to the same period last year. This growth was highlighted by an
increase in average total loans of $21.7 million, or 2.6%, to $843.3 million
and an increase in average investments of $102.0 million, or 57.2%, to $280.3
million. Average interest-bearing liabilities in the first nine months of 2002
increased $85.1 million, or 10.4%, to average $900.2 million as compared to the
same period last year. During the first nine months of 2002, average
interest-bearing deposit categories increased $9.2 million, or 1.3%, to $702.3
million as compared to the same period last year. Average borrowed funds
increased $75.9 million, or 62.2%, to $197.9 million during the same time
frame.

Interest income for the nine-month period ending September 30, 2002 was
$59.1 million, a decrease of $5.0 million or 7.8% compared to the first nine
months in 2001. The full year effect of the declining interest rate
environment during the year 2001 was the primary reason for the decrease in
interest income in 2002. The yield on interest-earning assets decreased 153
basis points to 7.04% for the nine-month period ended September 30, 2002 from
8.57% for the comparative period last year.

Interest expense decreased $8.0 million or 28.9% during the nine months
ended September 30, 2002 as compared to the same period last year. The
decrease in interest expense was principally the result of the declining
interest rate environment. The cost of interest-bearing funds decreased 163
basis points from 4.57% for the nine months ended September 30, 2001 to 2.94%
for the nine months ended September 30, 2002. The cost of funds decrease was
also primarily the result of the declining interest rate environment.

Net interest income was $39.2 million for the nine months ending September
30, 2002, representing an increase of $3.1 million or 8.5% from the nine month
period ended September 30, 2001. The net interest spread, which represents the
difference between the rate earned on average interest-earning assets and the
rate paid on average interest-bearing liabilities, increased to 4.10% for the
period ending September 30, 2002, compared to 4.00% for the same period in
2001. The increase in net interest spread was due primarily to a lower cost
mix of interest-bearing liabilities. Net interest income as a percentage of
average interest-earning assets, or the net interest margin, decreased to 4.68%
for the period ending September 30, 2002, compared to 4.84% for the period
ending September 30, 2001. The decrease in net interest margin was due to the
greater proportionate growth in the lower yielding interest-earning asset
categories along with a lower cost mix of interest-bearing liabilities offset
to a greater degree by the faster repricing of the Companys earning assets as
compared to interest-bearing liabilities in a period of declining interest
rates.

For the quarter ended September 30, 2002, net interest income was $13.7
million, which was an increase of $1.6 million, or 12.8%, from the same period
in 2001. The net interest spread decreased 8 basis points to 4.01% for the
three months ended September 30, 2002 from 4.09% for the three months ended
September 30, 2001. The net interest margin decreased from 4.85% for the
quarter ended September 30, 2001 to 4.57% for the same period in 2002. The
decrease in net interest spread and decrease in net interest margin are
attributable to the same trends as previously discussed.

The year 2001 was characterized by a declining rate environment. Interest
rates began a steady decline during the first quarter of 2001 and continued
their decline throughout the rest of the year. The yield on earning assets for
the year 2001 was 8.25% as compared to 8.57% for the nine months ended
September 30, 2001 and 7.04% for the nine months ended September 30, 2002. The
cost of interest-bearing liabilities for the year 2001 was 4.27% as compared to
4.57% for the nine months ended September 30, 2001 and 2.94% for the nine
months ended September 30, 2002.

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During the three months ended September 30, 2002, the yield on earning
assets decreased 117 basis points to 6.89% as compared to 8.06% for the three
months ended September 30, 2001. The cost of interest-bearing liabilities for
the quarter ended September 30, 2002, also decreased 110 basis points to 2.88%
from 3.98% for the quarter ended September 30, 2001.

PROVISION FOR CREDIT LOSSES

The allowance for credit losses at September 30, 2002 was $10.2 million,
compared to $9.9 million at September 30, 2001, an increase of $.4 million or
3.7%. As a percent of total loans, the allowance was 1.19% at September 30,
2002, compared to 1.17% at September 30, 2001 and 1.12% at December 31, 2001.
Due to the California energy issue, and its possible effect on the Companys
portfolio, an additional allocation was added to the allowance in the first
quarter of 2001. As the Company gathered more information regarding the
possible effect of the California energy issue on its loan customers, the
Company removed this allocation later in the year. 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 increased level of risk due to this
issue.

The provision for credit losses was $1,875,000 for the first nine months
of 2002, compared with $2,250,000 provided for the nine months ended September
30, 2001, a decrease of 16.7%. The provision was $625,000 for the third
quarter of 2002, compared to $750,000 for the third quarter of 2001, a decrease
of $125,000 or 16.7%.

Total non-performing loans as of September 30, 2002 were $14.6 million as
compared to $14.2 million at September 30, 2001 and $14.1 million at December
31, 2001. Non-performing loans increased $.5 million during the nine months
ended September 30, 2002. The largest share of the non-performing loan
balances for all of the mentioned periods is mainly attributable to two related
loans on a hotel placed in non-accrual status. The loans are fully secured and
the Company continues to aggressively work to resolve the lending relationship.
By continuing to build the loan loss reserve combined with the resolution of
the two problem hotel loans the Company anticipates improvement in its coverage
and reserve ratios.

Net charge-offs were $977,000 for the nine months ended September 30,
2002. This represents an increase of $302,000 when compared to $675,000 in net
charge offs for the same period in 2001. During the third quarter ending
September 30, 2002, $361,000 was recorded in net charge-offs compared to
$371,000 in net charge-offs in the third quarter of 2001.

The Bank has an established standard process for assessing the adequacy of
the allowance for credit losses. In addition to reviewing the inherent risks
of its 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 VIBs 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.

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Management of the Company believes the allowance at September 30, 2002,
was adequate based on present economic conditions and its ongoing evaluation of
the risks inherent in the Banks loan portfolio.

NON-INTEREST INCOME

Total non-interest income amounted to $7.9 million for the nine months
ended September 30, 2002 representing a decrease of $.9 million or 9.8%
compared with the same period in the prior year. The primary reasons for the
decrease in non-interest income were a decrease of $1.4 million in gain on the
sale of securities offset to some extent by an increase in service charges and
fees of $399,000, and an increase in other income of $283,000.

The increase in service charges and fees is related to the Companys
consolidation of its product line, the establishment of new products, and
growth in its core deposit base. The major component of the increase in other
income was dividend income from AT Services of $195,000.

Non-interest income for the quarter ended September 30, 2002 decreased
$314,000 to $2.3 million from $2.6 million for the same period in 2001. This
decrease is mostly due to decreases in gains on the sale of loans, and
decreases in dividend income on the cash surrender value of life insurance.

NON-INTEREST EXPENSE

Total non-interest expense for the nine months ended September 30, 2002
was $30.4 million, a decrease of $2.1 million or 6.5% as compared to the same
period in 2001.

Salary expense during the nine months ended September 30, 2002 was $11.0
million, a decrease of $1.1 million or 8.8% under the comparable period in
2001. The reduction in salary expense is partially attributable to $200,000 in
severance being paid in the period ended March 31, 2001 and the Companys
concentrated effort to reduce overhead by taking a number of actions to improve
efficiencies and provide cost savings. These actions included the dissolution
of its mortgage-banking business, consolidation of its three subsidiary banks
into one, and simplification of its product line. It is anticipated that the
full effect of these changes will be reflected in the financial performance of
the Company for the full year 2002. Employee benefits expense was $3.9 million
for the period ending September 30, 2002, a decrease of $108,000 or 2.7% from
the same period in the prior year.

Occupancy expense was $2,757,000 for the nine-month period ended September
30, 2002, an increase of $86,000 or 3.2% as compared to the first nine months
in 2001. Furniture and equipment expense was $2,503,000 for the nine-month
period ended September 30, 2002, a decrease of $220,000 or 8.1% from the same
period in 2001. This decrease was primarily the result of the Companys
decreased depreciation expense on the planned obsolescence of furniture and
equipment.

Other operating expense amounted to $10.3 million during the nine-month
period ended September 30, 2002, a decrease of $810,000 or 7.3% from the same
period in the prior year. The decrease was attributable to decreases in the
amortization of intangibles,

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general office expenses, and promotional
expenses.

For the three months ended September 30, 2002, non-interest expense was
$10.7 million. This was a decrease of $24,000 or .2% from the same period in
2001.

INCOME TAXES

Income tax expense for the nine months ending September 30, 2002 was
$4,516,000 as compared with $3,554,000 for the same period in 2001. The
increase in expense was primarily attributable to a $5.1 million increase in
taxable income. The Companys effective tax rate was 30.3% for the nine months
ended September 30, 2002 as compared to 34.9% for the same period in the prior
year, a decrease due primarily to the non-taxability of dividends at the state
level from VIB Investment Trust and to a lesser extent to a decrease of $.5
million in nontaxable interest income.

Income taxes for the third quarter were $1,051,000, a decrease of $100,000
or 8.7% from the third quarter of 2001. The Companys effective tax rate was
22.0% for the three months ended September 30, 2002 as compared to 34.0% for
the same period in the prior year. The decrease in expense and effective tax
rate for the third quarter was primarily related to the non-taxability of VIB
Investment Trust at the state level offset to some extent by an increase of
$1,410,000 in the Companys taxable income.

CAPITAL RESOURCES

Total stockholders equity as of September 30, 2002 was $97.0 million,
which represented an increase of $15.3 million from December 31, 2001, and
$17.0 million from September 30, 2001. The increase since December 31, 2001
included $10.4 million in net income, $1.4 million from the exercising of stock
options, and a $3.6 million increase in the cumulative unrealized gain on
securities classified as available for sale. The increase since September 30
2001 included $13.0 million in net income, $1.6 million from the exercising of
stock options, and a $2.5 million increase in the cumulative unrealized gain 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
September 30, 2002 the Tier 1 and total risk based capital ratios were 11.53%
and 12.86%, respectively, compared to 9.55% and 11.30%, respectively, at
September 30, 2001. 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
8.41% at September 30, 2002, compared to 8.00% at September 30, 2001. 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.

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LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

VIBs liquidity position remains adequate to meet future contingencies.
At September 30, 2002 VIB had $168.7 million in net Federal funds purchased and
FHLB advances outstanding. This compared to $156.9 million in net Federal
funds purchased and FHLB advances outstanding at September 30, 2001. Since
December 31, 2001, net Federal funds purchased and FHLB advances have
increased $13.9 million. The increases are attributable to the Companys use
of leveraging strategies to enhance earnings. These strategies, which involve
borrowing at a fixed cost 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. As a result, there has been an increase
in outstanding balances of FHLB advances. VIBs liquidity ratio at September
30, 2002 was 25.5%. This ratio represented an increase from 20.3% at September
30, 2001 and an increase from 21.4% at December 31, 2001.

The Companys Asset/Liability Committee (ALCO) functions to oversee the
maintenance of liquidity and to preserve 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 required 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 the interest rate sensitivity or repricing
characteristics of VIBs assets and liabilities. The primary source of
earnings for VIB is net interest income, which is subject to movements in
interest rates. To minimize the effect of changes in rates, the balance sheet
requires structuring in order that the repricing opportunities for both assets
and liabilities exist in nearly equivalent amounts and at approximately similar
time intervals. Interval differences may exist at times creating interest
sensitivity gaps, which represent the difference between interest sensitive
assets and interest sensitive liabilities. These gaps are static in nature and
do not consider future activity. As such, these gap measurements serve best as
an indicator for potential interest rate exposure.

The sensitivity to interest rate fluctuations is measured in several time
frames. Various strategies such as liability cost administration and
redeployment of asset maturities are utilized to preserve interest income from
the effect of changes in interest rates. The gap positions are monitored as a
function of the asset and liability management process. The monitoring process
includes the use of periodic simulated business forecasts, which incorporate
various interest rate environments. Financial modeling is utilized to assist
management in maintaining consistent earnings in an environment of changing
interest rates.

VIB does not maintain trading accounts for any class of financial
instrument nor does it purchase high-risk derivative instruments.
Furthermore, VIB is not subject to foreign currency exchange rate risk or
commodity price risk.

In addition to gap measurement, the ALCO is further responsible for the
measurement of interest rate risk, i.e., the risk of loss in value due to
changes in interest rates. The ALCO monitors and considers methods of managing
interest rate risk by monitoring changes in net portfolio value (NPV) and net
interest income under various interest rate scenarios. The ALCO attempts to
manage the various components of the balance sheet to minimize the impact of
sudden and sustained changes in interest rates on NPV and net interest income.

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VIBs exposure to interest rate risk is reviewed on a periodic basis by
the Board of Directors and ALCO. If potential changes to NPV and net interest
income resulting from hypothetical interest rate swings are not within the
limits established by the Board, the Board may direct management to adjust its
assets and liability mix to bring interest rate risk within Board-approved
limits.

VIB utilizes interest rate sensitivity analysis to measure interest rate
risk by computing estimated changes in NPV of cash flows from assets and
liabilities within a range of assumed changes in market interest rates. NPV
represents the market value of portfolio equity and is equal to the market
value of assets minus the market value of liabilities. This analysis assesses
the risk of loss in market rate sensitive instruments in the event of sudden
and sustained increases and decreases in market interest rates ranging from one
hundred to three hundred basis points. The Board of Directors has adopted an
interest rate risk policy, 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 September 30, 2002.
Although the majority of the assets and liabilities are at the bank level, the
table does include the effect of the Companys trust preferred obligations.

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VIB CORP
Change in Net Portfolio Value
at September 30, 2002

|                         |  |                 |         |        |  |                   |         |   |  |  |       |   
|------------------------ |  | --------------- | ------- | ------ |  | ----------------- | ------- | - |  |  | ----- | --
|                         |  | Net             |         | Actual |  |                   |         |  
|Change in Interest Rates |  | Portfolio Value |         | Change |  | Percentage Change
|                         |  |                 |         |        |  |                  
|(Dollars in Thousands)   |  |                 |         |        |  |                   |         |   |  |  |       |   
|300 basis point rise     |  | $               | 159,157 |        |  | $                 | 25,298  |   |  |  | 18.9  | % 
|200 basis point rise     |  |                 | 159,070 |        |  |                   | 25,211  |   |  |  | 18.8  | % 
|100 basis point rise     |  |                 | 150,860 |        |  |                   | 17,001  |   |  |  | 12.7  | % 
|Base Rate Scenario       |  |                 | 133,859 |        |  |                   |        |   |  |  |      |   
|100 basis point decline  |  |                 | 106,601 |        |  |                   | (27,258 | ) |  |  | (20.4 | )%
|200 basis point decline  |  |                 | 86,088  |        |  |                   | (47,771 | ) |  |  | (35.7 | )%
|300 basis point decline  |  |                 | 82,818  |        |  |                   | (51,041 | ) |  |  | (38.1 | )%

VIB CORP
Change in Net interest Income
at September 30, 2002

|                         |  |                 |        |        |  |                   |         |   |  |  |       |   
|------------------------ |  | --------------- | ------ | ------ |  | ----------------- | ------- | - |  |  | ----- | --
|                         |  | Net             |        | Actual |  |                   |         |  
|Change in Interest Rates |  | Interest Income |        | Change |  | Percentage Change
|                         |  |                 |        |        |  |                  
|(Dollars in Thousands)   |  |                 |        |        |  |                   |         |   |  |  |       |   
|300 basis point rise     |  | $               | 52,583 |        |  | $                 | 3,364   |   |  |  | 6.8   | % 
|200 basis point rise     |  |                 | 52,357 |        |  |                   | 3,138   |   |  |  | 6.4   | % 
|100 basis point rise     |  |                 | 51,205 |        |  |                   | 1,986   |   |  |  | 4.0   | % 
|Base Rate Scenario       |  |                 | 49,219 |        |  |                   |        |   |  |  |      |   
|100 basis point decline  |  |                 | 45,709 |        |  |                   | (3,510  | ) |  |  | (7.1  | %)
|200 basis point decline  |  |                 | 41,368 |        |  |                   | (7,851  | ) |  |  | (16.0 | %)
|300 basis point decline  |  |                 | 36,374 |        |  |                   | (12,845 | ) |  |  | (26.1 | %)

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

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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.

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 trust preferred 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 trust preferred securities, or to maintain
its separate liquidity. Under such circumstances, the Company would be forced
to seek other means to raise capital. At September 30, 2002 the Company had
adequate liquidity to meet its anticipated funding needs.

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 .9% at September 30, 2002 reduces the 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 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Companys Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms, and that such information is
accumulated and communicated to the

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Companys management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. Based upon an evaluation within the
90 days prior to the filing date of this report, the Companys Chief Executive
Officer and Chief Financial Officer concluded that the Companys disclosure
controls and procedures are effective. There have been no significant changes
in the Companys internal controls or in other factors that could significantly
affect the Companys internal controls subsequent to the date of the
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.




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

| |                
| | ---------------
| | Not applicable.




ITEM 5. OTHER INFORMATION

| |                
| | ---------------
| | Not applicable.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

| |      
| | -----
| | None.

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(b)  Current Reports on Form 8-K:

| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | During the quarter ended September 30, 2002 the Company filed the
following Current Reports on Form 8-K:

|                                                                                    |  |               
|----------------------------------------------------------------------------------- |  | --------------
|Description                                                                         |  | Date of Report
|                                                                                    |  |               
|Agreement and Plan of Reorganization
by and between VIB Corp and
Rabobank Nederland |  | August 1, 2002
|                                                                                    |  |               
|Certifications pursuant to the Sarbanes-Oxley Act of 2002                           |  | August 9, 2002
|                                                                                    |  |               




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: November 8, 2002 |  |                                                                            
|                       |  | /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

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##### Table of Contents



CERTIFICATIONS



| |    |  | I, Dennis L. Kern, certify that:                                                                                                                                                                                                                                                                                                                                                         
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 1. |  | I have reviewed this quarterly report on Form 10-Q of VIB Corp;                                                                                                                                                                                                                                                                                                                          
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;                                                           
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                                                                              
|
| | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                                                                                
|
| |    |  | a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;                                                                                       
|
| |    |  | b) Evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                                                                                                                         
|
| |    |  | c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                                                                                                               
|
| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):                                                                                                                                           
|
| |    |  | a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and                                                                                        
|
| |    |  | b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                                                                                                                
|
| | 6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

|                       |  |                                                      
|---------------------- |  | -----------------------------------------------------
|Date: November 8, 2002 |  | /s/ Dennis L. Kern                                   
|                       |  |                                                      
|                       |  | Dennis L. Kern,
President and Chief Executive Officer

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| |    |  | I, Harry G. Gooding, III, certify that:                                                                                                                                                                                                                                                                                                                                                  
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 1. |  | I have reviewed this quarterly report on Form 10-Q of VIB Corp;                                                                                                                                                                                                                                                                                                                          
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;                                                           
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                                                                              
|
| | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                                                                                
|
| |    |  | a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;                                                                                       
|
| |    |  | b) Evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                                                                                                                         
|
| |    |  | c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                                                                                                               
|
| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):                                                                                                                                           
|
| |    |  | a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and                                                                                        
|
| |    |  | b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                                                                                                                
|
| | 6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

|                        |  |                                                                            
|----------------------- |  | ---------------------------------------------------------------------------
|Dated: November 8, 2002 |  | /s/ Harry G. Gooding, III                                                  
|                        |  |                                                                            
|                        |  | Harry G. Gooding, III,
Executive Vice President and Chief Financial Officer

28