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Dennis Kern is pleased with VIB rankings

December 10, 2001|By JENNIFER RALTON-SMITH, Staff Writer

The fourth annual San Diego Inc. rankings placed Valley Independent Bank at No. 18 in an overall performance survey of 103 publicly traded companies doing business in Southern California.

The rankings, drawn from financial data compiled by Media General Financial Services for the fiscal 2001 and published in October by the San Diego Union-Tribune, also pegged VIB in the No. 15 slot of the top 25 companies showing the highest return on investor equity.

Sitting in his corner office overlooking Imperial Avenue in El Centro, Dennis Kern, president and chief executive officer of VIB, appeared quietly pleased with the rankings.

Kern said placing 15th in the top return on equity category was acknowledgment of VIB's strong performance during the previous year.


"Being among the top 15 companies in an area means that you're doing something right," Kern said.

"All our investors down here should look at that information and know that that is impressive," Kern added.

At the helm of VIB for 18 of its 20 years, Kern attributes the success of his bank to its strong local investor and customer base.

VIB came into being in 1981 when a group of local businessmen decided they needed a local banking alternative to the banks that were in the Valley. It was felt the major banks were not paying enough attention to the financial needs of the local economy, Kern said.

VIB capital has traditionally been raised locally and in Kern's words "customers became investors — that's the way we grew."

By the early 1990s, Kern said, the bank had a strong market share locally but needed to expand and diversify its loan portfolio and customer base to minimize the risk to investors.

"There was a lot of consolidation going on in the banking industry at that time. Economically things were tough nationwide," he said.

It was against that backdrop that VIB made its first acquisition, First National Bank of Coachella, in 1992.

VIB has grown to the point that it now has two subsidiaries — VIB, headquartered in El Centro, and Bank of Stockdale, headquartered in Bakersfield.

VIB has 15 branches in Imperial, Riverside and San Diego counties and business loan centers in Southern and Central California and Arizona and Nevada.

Bank of Stockdale operates three branches and a business loan center in the San Jaoquin Valley.

VIB went public in 1992, listing on the NASDAQ stock exchange.

Kern said he is not aware of any other locally owned company that is publicly traded.

"Local people, whether they own any part of us or not, should be proud of this," he said.

Kern described his bank's lending base as being diversified.

"We don't just lend to the agricultural community … agricultural crops is probably 9 to 10 percent of our portfolio."

Kern estimated that agricultural-related business would account for another 10 percent of loans.

With a loan portfolio emphasizing real estate and business loans, Kern said his bank lends a lot of money for housing construction in the Imperial Valley.

Kern estimates the number of shareholders in VIB to be close to 5,000 and stresses proudly that most of those stockholders are customers. He delights in the retelling of a recent encounter with two such stockholders.

"I was walking into a local supermarket and stopped to buy a couple of those poppies volunteers sell each year on behalf of Veterans of Foreign Wars," he said.

"One of the guys selling the poppies looks up at me and calls out ‘Mr. VIB!' He could not remember my name but he knew I worked for the bank.

"He then went on to tell me that he has been banking with us since day one and although I probably didn't know it, he owns part of the bank."

Kern chuckled appreciatively as he continued with the story.

"Then the other guy with him pipes up and says he owns stock in VIB as well."

>> Staff Writer Jennifer Ralton-Smith can be reached at 337 3442 or

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