<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: February 9, 1999
------------------------------------------
VIB Corp
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
333-43021 33-0780371
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(Commission File Number) (IRS Employer I.D. Number)
1498 Main Street, El Centro, California 92243
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(Address of principal executive offices) (Zip Code)
(760) 337-3200
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
Branch Acquisition
On January 22, 1999, the Registrant's wholly-owned subsidiary, Valley
Independent Bank (the "Bank"), a California state-chartered bank, consummated
the acquisition (the "Acquisition") of the Hemet, California branch (the
"Branch") of Fremont Investment and Loan, an unrelated party. The Branch is
located at 2091 West Florida Avenue, Suite 100, Hemet, California 94525. The
Acquisition was pursuant to a purchase and assumption agreement (the
"Agreement") dated September 22, 1998.
Pursuant to the Agreement, the Bank 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
and was based upon payment of a 1% premium on the deposits assumed. In
consummation of the Acquisition, the Bank used its own funds.
Merger
On January 28, 1999, in a separate transaction pursuant to an Agreement
and Plan of Reorganization dated September 15, 1998 approved by the Registrant's
shareholders and the shareholders of Bank of Stockdale, F.S.B. ("Stockdale"), an
unrelated party, on January 12, 1999, Stockdale was merged ( the "Merger") into
BOS Interim Bank, F.S.B., the Registrant's wholly-owned subsidiary, whereby
Stockdale became the Registrant's wholly-owned subsidiary.
As a result of the Merger, the Registrant 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 Merger was accounted for as a pooling of interests. The Registrant
is in the process of issuing approximately 2,355,431 shares of its common stock
in exchange for all 1,212,265 shares of Stockdale's issued and outstanding
common stock (at an exchange ratio of 1.943 to 1). The total value of the
consideration exchanged approximates $25.9 million, based upon an $11.00 per
share closing market price of the Registrant's common stock on January 28, 1999.
Additionally Mr. Ed Hickman, Stockdale's President and Chief Executive Officer
and one of its Directors, was added to the Registrant's Board of Directors.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The Branch - The Registrant has not included separate financial
statements for the Branch, since the nature of the transaction was in substance
an assumption of liabilities and the Branch is not a stand-alone entity which
issued separate financial statements.
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<PAGE> 3
Stockdale - The following financial statements of Stockdale are
included in Registrant's Registration Statement on Form S-4 dated December 11,
1998 and are incorporated herein by this reference:
<TABLE>
<CAPTION>
Page in Registration
Description Statement
----------- --------------------
<S> <C>
Independent Auditor's Report F-35
Balance Sheets - December 31, 1997 and 1996 F-36
Statements of Income - Years Ended December 31, 1997, 1996 & 1995 F-37
Statements of Changes in Shareholders' Equity - Years Ended
December 31, 1997, 1996 & 1995 F-38
Statements of Cash Flows - December 31, 1997, 1996 & 1995 F-39
Notes to Financial Statements F-41
Balance Sheets - September 30, 1998 & 1997 (unaudited) F-69
Statements of Income - Nine Months Ended September 30,
1998 & 1997 (unaudited) F-70
Statements of Changes in Shareholders' Equity - Nine Months
Ended September 30, 1998 and 1997 (unaudited) F-71
Statements of Cash Flows - September 30, 1998 & 1997 (unaudited) F-72
Notes to Unaudited Financial Statements F-74
</TABLE>
(b) Pro Forma Financial Information.
The Branch - Pro forma financial information for the Branch has
not been included by the Registrant because the transaction was in substance an
assumption of liabilities and the Branch did not issue separate financial
statements. Consequently, such information is not required pursuant to Section
210.11-01 of Article 11 of Regulation S-X.
Stockdale - The following pro forma financial information for the
Registrant and Stockdale is included in this Form 8-K:
<TABLE>
<CAPTION>
Description Page
----------- ----
<S> <C>
Introduction 5
Unaudited Pro Forma Combined Balance Sheet at September
30, 1998 6
Unaudited Pro Forma Combined Condensed Income Statement
for the Nine Months Ended September 30, 1998 7
Unaudited Pro Forma Combined Condensed Income Statement
for the Nine Months Ended September 30, 1997 8
Unaudited Pro Forma Combined Condensed Income Statement
for the Year Ended December 31, 1997 9
Unaudited Pro Forma Combined Condensed Income Statement
for the Year Ended December 31, 1996 10
Unaudited Pro Forma Combined Condensed Income Statement
for the Year Ended December 31, 1995 11
Notes to Unaudited Pro Forma Combined Condensed
Financial Data 12
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
(c) Exhibits. Page
--------- ----
<S> <C>
2.1 Agreement and Plan of Reorganization by and
between VIB Corp and Bank of Stockdale, F.S.B.
dated September 15, 1998 (1)
2.2 Agreement to Assume Liabilities and to Acquire
Assets of Branch Office between Fremont
Investment & Loan and Valley Independent Bank
dated September 22, 1998 (2)
</TABLE>
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 hereunto duly authorized.
VIB CORP
Date: February 9, 1999 /s/ Harry G. Gooding, III
-----------------------------------------
Harry G. Gooding, III
Executive Vice President
and Chief Financial Officer
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(1) Filed as Exhibit 2.1 to Registrant's Form 8-K dated September 29, 1998.
(2) Filed as Exhibit 2.2 to Registrant's Form 8-K dated September 29, 1998.
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<PAGE> 5
PRO FORMA FINANCIAL STATEMENTS
Introduction
The following unaudited Pro Forma Combined Condensed Financial
Statements combine the historical consolidated condensed financial statements of
VIB Corp and the historical consolidated condensed financial statements of
Stockdale, giving the effect to the Merger as if it had been effective on
September 30, 1998, with respect to the Pro Forma Combined Condensed Balance
Sheet, and as of the beginning of the periods indicated, with respect to the Pro
Forma Combined Condensed Statements of Income. This information is presented
under the pooling of interests accounting method. Per share data have not been
adjusted to reflect the 3% stock dividend paid on December 11, 1998, to
shareholders of record on November 20, 1998.
The information for the period ended September 30, 1998 is derived from
the unaudited financial statements of VIB Corp and Stockdale which includes, in
the opinion of the management of both companies, all adjustments (consisting
only of normal accruals) necessary to present fairly the data for such periods.
This information should be read in conjunction with the historical financial
statements of the companies, including their respective notes thereto, which are
included herein, and in conjunction with the combined condensed historical
selected financial data and other pro forma combined financial information,
including the notes thereto, appearing elsewhere herein.
The effect of estimated merger and reorganization costs expected to be
incurred in connection with the Merger have been reflected in the Unaudited Pro
Forma Combined Condensed Balance Sheet, but are not reflected in the Unaudited
Pro Forma Combined Condensed Statements of Income because they are not expected
to have a continuing impact on the combined organization. (See Note 2 to the
Unaudited Pro Forma Combined Condensed Financial Information.) The unaudited pro
forma combined condensed financial statements do not give effect to any
anticipated operating efficiencies in conjunction with the Merger.
The Unaudited Pro Forma Combined Condensed Balance Sheet is not
necessarily indicative of the actual financial position that would have existed
had the Merger been consummated as of September 30, 1998, or that may exist in
the future. The Unaudited Pro Forma Combined Condensed Income Statements are not
necessarily indicative of the results that would have occurred had the Merger
been consummated on the dates indicated or that may be achieved in the future.
Assuming consummation of the Merger, the actual financial position and results
of operations will differ, perhaps significantly, from the pro forma amounts
reflected herein because of a variety of factors, including changes in values
and changes in operating results between the dates of the unaudited pro forma
financial data and the date on which the Merger takes place.
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<PAGE> 6
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
VIBC STOCKDALE PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS:
Cash and due from banks $ 31,363 $ 5,867 $ (992) $ 36,238
Federal funds sold 6,000 0 6,000
----------- ----------- ----------- -----------
Total cash and cash equivalents 37,363 5,867 (992) 42,238
Interest bearing deposits 664 400 1,064
Federal Reserve Bank and Federal
Home Loan Bank stock, at cost 2,306 1,045 3,351
Securities held to maturity 0 1,461 1,461
Securities available for sale 80,478 23,628 104,106
----------- ----------- ----------- -----------
Total securities 82,784 26,134 0 108,918
Net loans 344,221 98,995 (300) 442,916
Premises and equipment 11,395 1,117 12,512
Other real estate owned 148 727 875
Other assets 14,753 4,856 190 19,799
----------- ----------- ----------- -----------
Total assets $ 491,328 $ 138,096 $ (1,102) $ 628,322
=========== =========== =========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES:
Non-interest bearing deposits $ 121,307 $ 15,467 $ 0 $ 136,774
Interest bearing deposits 320,486 108,381 428,867
----------- ----------- ----------- -----------
Total deposits 441,793 123,848 0 565,641
Borrowed funds 0 3,000 3,000
Accrued interest payable and other
liabilities 5,566 1,428 6,994
----------- ----------- ----------- -----------
Total liabilities 447,358 128,276 0 575,634
SHAREHOLDERS' EQUITY:
Common stock and surplus 36,230 10,657 0 46,887
Retained earnings (accumulated deficit) 7,281 (881) (1,102) 5,298
Unrealized net gains (losses) on
investments available for sale 458 44 502
----------- ----------- ----------- -----------
Total shareholders' equity 43,969 9,820 $ (1,102) 52,687
----------- ----------- ----------- -----------
Total liabilities & shareholders' equity $ 491,328 $ 138,096 (1,102) $ 628,322
=========== =========== =========== ===========
Number of common shares outstanding 7,804,991 1,212,265 9,984,643
Common shareholders' equity per share $ 5.63 $ 8.10 $ 5.28
</TABLE>
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<PAGE> 7
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
VIBC AND
VIBC STOCKDALE STOCKDALE
(HISTORICAL) (HISTORICAL) PRO FORMA
----------- ----------- -----------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans $ 25,534 $ 6,299 $ 31,833
Interest on interest bearing deposits in
other banks 30 156 186
Interest on investment securities 3,381 1,193 4,574
Interest on federal funds sold 263 0 263
----------- ----------- -----------
Total interest income 29,208 7,648 36,856
INTEREST EXPENSE:
Interest expense on deposits 8,647 3,876 12,523
Interest expense on borrowings 367 31 398
----------- ----------- -----------
Total interest expense 9,014 3,907 12,921
----------- ----------- -----------
NET INTEREST INCOME 20,194 3,741 23,935
Less: provisions for loan losses 1,665 306 1,971
----------- ----------- -----------
Net interest income after
provision for loan losses 18,529 3,435 21,964
NON-INTEREST INCOME:
Gains from loan sales 378 605 983
Loan servicing income 218 88 306
Service charges, commissions and fees 2,858 499 3,357
Securities gains 285 0 285
Other income 313 391 704
----------- ----------- -----------
Total non-interest income 4,053 1,583 5,636
NON-INTEREST EXPENSE:
Salaries and benefits 8,506 1,925 10,431
Occupancy, furniture and equipment 3,120 491 3,611
Postage and freight 149 62 211
Advertising and business development 1,142 155 1,297
Other real estate owned 112 177 289
Professional services 1,101 145 1,246
Telephone, stationery and supplies 1,135 202 1,337
Data processing 939 128 1,067
Intangible asset amortization 357 0 357
Other expense 1,033 832 1,865
----------- ----------- -----------
Total non-interest expense 17,594 4,117 21,711
----------- ----------- -----------
Income before income taxes 4,988 901 5,889
Income taxes 1,749 193 1,942
----------- ----------- -----------
Net income $ 3,239 $ 708 $ 3,947
=========== =========== ===========
PER SHARE INFORMATION:
Number of shares (weighted average)
Basic 7,765,359 1,212,265 9,945,011
Diluted 8,139,184 1,226,967 10,345,271
Income per share
Basic $ 0.42 $ 0.58 $ 0.40
Diluted 0.40 0.58 0.38
</TABLE>
-7-
<PAGE> 8
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30,1997
<TABLE>
<CAPTION>
VIBC AND
VIBC STOCKDALE STOCKDALE
(HISTORICAL) (HISTORICAL) PRO FORMA
------------ ------------ -----------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans $ 19,786 $ 6,119 $ 25,905
Interest on interest bearing deposits in
other banks 38 130 168
Interest on investment securities 3,325 1,039 4,364
Interest on federal funds sold 315 0 315
----------- ----------- -----------
Total interest income 23,465 7,288 30,753
INTEREST EXPENSE:
Interest expense on deposits 7,550 3,981 11,531
Interest expense on borrowings 93 59 152
----------- ----------- -----------
Total interest expense 7,643 4,040 11,683
----------- ----------- -----------
NET INTEREST INCOME 15,822 3,248 19,070
Less: provision for loan losses 1,070 354 1,424
----------- ----------- -----------
Net interest income after provision for loan losses 14,752 2,894 17,646
NON-INTEREST INCOME:
Gains from loan sales 424 417 841
Loan servicing income 179 101 280
Service charges, commissions and fees 2,483 438 2,921
Securities gains 192 0 192
Other income 306 307 613
----------- ----------- -----------
Total non-interest income 3,585 1,263 4,848
NON-INTEREST EXPENSE:
Salaries and benefits 7,395 1,806 9,201
Occupancy, furniture and equipment 2,479 482 2,961
Postage and freight 135 66 201
Advertising and business development 1,045 85 1,130
Other real estate owned 70 420 490
Professional services 1,011 172 1,183
Telephone, stationery and supplies 843 168 1,011
Data processing 772 186 958
Intangible asset amortization 227 0 227
Other expense 982 686 1,668
----------- ----------- -----------
Total non-interest expense 14,959 4,071 19,030
----------- ----------- -----------
Income before income taxes 3,378 86 3,464
Income taxes (benefit) 1,089 (15) 1,074
----------- ----------- -----------
Net income $ 2,289 $ 101 $ 2,390
=========== =========== ===========
PER SHARE INFORMATION:
Number of shares (weighted average)
Basic 7,009,804 757,719 8,372,183
Diluted 7,411,700 759,880 8,777,964
Income per share
Basic $ 0.33 $ 0.13 $ 0.28
Diluted 0.31 0.13 0.27
</TABLE>
-8-
<PAGE> 9
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
VIBC AND
VIBC STOCKDALE STOCKDALE
(HISTORICAL) (HISTORICAL) PRO FORMA
------------ ------------ ------------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans $ 27,632 $ 8,054 $ 35,686
Interest on interest bearing deposits in
other banks 53 240 293
Interest on investment securities 4,431 1,418 5,849
Interest on federal funds sold 343 0 343
----------- ----------- -----------
Total interest income 32,459 9,712 42,171
INTEREST EXPENSE:
Interest expense on deposits 10,213 5,328 15,541
Interest expense on borrowings 208 62 270
----------- ----------- -----------
Total interest expense 10,421 5,390 15,811
----------- ----------- -----------
NET INTEREST INCOME 22,038 4,322 26,360
Less: provisions for loan losses 1,850 415 2,265
----------- ----------- -----------
Net interest income after
provision for loan losses 20,188 3,907 24,095
NON-INTEREST INCOME:
Gains from loan sales 1,182 576 1,758
Loan servicing income 240 136 376
Service charges, commissions and fees 3,314 599 3,913
Securities gains 551 0 551
Other income 464 430 894
----------- ----------- -----------
Total non-interest income 5,751 1,741 7,492
NON-INTEREST EXPENSE:
Salaries and benefits 9,800 2,417 12,217
Occupancy, furniture and equipment 3,478 639 4,117
Postage and freight 173 91 264
Advertising and business development 1,414 121 1,535
Other real estate owned 23 478 501
Professional services 1,403 206 1,609
Telephone, stationery and supplies 1,159 236 1,395
Data processing 1,030 249 1,279
Intangible asset amortization 316 0 316
Other expense 1,399 953 2,352
----------- ----------- -----------
Total non-interest expense 20,195 5,390 25,585
----------- ----------- -----------
Income before income taxes 5,744 258 6,002
Income taxes (benefit) 1,943 (44) 1,899
----------- ----------- -----------
Net income $ 3,801 $ 302 $ 4,103
=========== =========== ===========
PER SHARE INFORMATION:
Number of shares (weighted average)
Basic 7,074,698 768,926 8,457,227
Diluted 7,518,747 770,551 8,904,198
Income per share
Basic $ 0.54 $ 0.39 $ 0.49
Diluted 0.51 0.39 0.46
</TABLE>
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<PAGE> 10
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
VIBC AND
VIBC STOCKDALE STOCKDALE
(HISTORICAL) (HISTORICAL) PRO FORMA
------------ ------------ ------------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans $ 21,979 $ 8,082 $ 30,061
Interest on interest bearing deposits in
other banks 21 270 291
Interest on investment securities 1,975 1,333 3,308
Interest on federal funds sold 287 0 287
------------ ------------ ------------
Total interest income 24,261 9,685 33,946
INTEREST EXPENSE:
Interest expense on deposits 6,985 5,414 12,399
Interest expense on borrowings 143 216 359
------------ ------------ ------------
Total interest expense 7,128 5,630 12,758
------------ ------------ ------------
NET INTEREST INCOME 17,133 4,055 21,188
Less: provisions for loan losses 635 854 1,489
------------ ------------ ------------
Net interest income after
provision for loan losses 16,498 3,201 19,699
NON-INTEREST INCOME:
Gains from loan sales 423 509 932
Loan origination fees 88 0 88
Loan servicing income 235 132 367
Service charges, commissions and fees 1,904 547 2,451
Securities gains 49 58 107
Other income 375 283 658
------------ ------------ ------------
Total non-interest income 3,075 1,529 4,604
NON-INTEREST EXPENSE:
Salaries and benefits 8,192 2,298 10,490
Occupancy, furniture and equipment 2,728 696 3,424
Postage and freight 149 60 209
Advertising and business development 1,263 110 1,373
Other real estate owned 157 356 513
Professional services 874 282 1,156
Telephone, stationery and supplies 721 197 918
Data processing 698 253 951
Other expense 968 2,176 3,144
------------ ------------ ------------
Total non-interest expense 15,749 6,428 22,177
------------ ------------ ------------
Income (loss) before income taxes 3,824 (1,698) 2,126
Income taxes (benefit) 1,249 (729) 520
------------ ------------ ------------
Net income (loss) $ 2,575 $ (969) $ 1,606
============ ============ ============
PER SHARE INFORMATION:
Number of shares (weighted average)
Basic 6,827,596 757,719 8,189,975
Diluted 7,238,814 760,985 8,607,065
Income per share
Basic $ 0.38 $ (1.28) $ 0.20
Diluted 0.36 (1.27) 0.19
</TABLE>
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<PAGE> 11
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
VIBC AND
VIBC STOCKDALE STOCKDALE
(HISTORICAL) (HISTORICAL) PRO FORMA
------------ ------------ ------------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans $ 19,197 $ 8,306 $ 27,503
Interest on interest bearing deposits in
other banks 0 279 279
Interest on investment securities 1,887 1,575 3,462
Interest on federal funds sold 691 0 691
------------ ------------ ------------
Total interest income 21,776 10,160 31,936
INTEREST EXPENSE:
Interest expense on deposits 5,951 5,555 11,506
Interest expense on borrowings 23 614 637
------------ ------------ ------------
Total interest expense 5,973 6,169 12,142
------------ ------------ ------------
NET INTEREST INCOME 15,803 3,991 19,794
Less: provisions for loan losses 1,008 475 1,483
------------ ------------ ------------
Net interest income after
provision for loan losses 14,795 3,516 18,311
NON-INTEREST INCOME:
Gains from loan sales 179 737 916
Loan origination fees 326 0 326
Loan servicing income 209 124 333
Service charges, commissions and fees 1,511 424 1,935
Securities gains 2 149 151
Other income 292 360 652
------------ ------------ ------------
Total non-interest income 2,519 1,794 4,313
NON-INTEREST EXPENSE:
Salaries and benefits 7,350 2,650 10,000
Occupancy, furniture and equipment 2,038 807 2,845
Postage and freight 116 60 176
Advertising and business development 946 80 1,026
Other real estate owned 0 254 254
Professional services 924 290 1,214
Telephone, stationery and supplies 518 232 750
Data processing 593 304 897
Other expense 964 1,623 2,587
------------ ------------ ------------
Total non-interest expense 13,449 6,300 19,749
------------ ------------ ------------
Income (loss) before income taxes 3,865 (990) 2,875
Income taxes (benefit) 1,440 (334) 1,106
------------ ------------ ------------
Net income (loss) $ 2,425 $ (656) $ 1,769
============ ============ ============
PER SHARE INFORMATION:
Number of shares (weighted average)
Basic 6,645,737 757,719 8,008,116
Diluted 7,162,180 760,985 8,530,431
Income per share
Basic $ 0.36 $ (0.87) $ 0.22
Diluted 0.34 (0.86) 0.21
</TABLE>
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<PAGE> 12
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
NOTE 1: BASIS OF PRESENTATION. Certain historical data of Stockdale have
been reclassified on a pro forma basis to conform to VIB Corp's classifications.
Transactions between the companies are not material in relation to the unaudited
pro forma combined financial statements, and have not been eliminated from the
pro forma combined amounts.
NOTE 2: MERGER COSTS. The Unaudited Pro Forma Combined Condensed Balance
Sheet reflects management's current estimate, for purposes of pro forma
presentation, of the aggregate estimated merger costs of $1,292,000 ($1,102,000
net of taxes for deductible expenditures) expected to be incurred in connection
with the Merger. While a portion of these costs may be required to be recognized
over time, the current estimate of these costs has not been recorded in the
Unaudited Pro Forma Combined Condensed Income Statement for September 30, 1998,
because they are not expected to have a continuing impact on the combined
organization. The estimated aggregate costs include the following:
<TABLE>
<S> <C>
Computer conversion costs $ 200,000
Investment banking fees 682,000
Legal and other professional costs 80,000
Printing costs 30,000
Other costs 300,000
----------
Total Estimated Aggregate Costs $1,292,000
==========
</TABLE>
The foregoing cost estimates are forward-looking. The ultimate level and
timing of recognition of such costs will be based on many factors beyond the
control of VIB Corp or Stockdale. The type and amount of actual costs incurred
could vary materially from these estimates if future developments differ from
the underlying assumptions used by management in determining the current
estimate of these costs.
NOTE 3: COMMON SHARES OUTSTANDING. The unaudited pro forma number of
common shares outstanding, common shareholders' equity per share, number of
shares (basic and diluted) and income per share (basic and diluted) are based on
the share amounts for VIB Corp plus the historical share amounts for Stockdale
multiplied by the assumed exchange ratio of 1.798. The Merger between the
Company and Stockdale was consummated on January 28, 1999. The actual exchange
ratio is 1.943 and will result in the issuance of approximately 176,000 shares
in addition to the amount used in the foregoing calculations.
-12-
