"Looking forward, the cumulative effects of these initiatives for greater efficiencies and cost savings should have an even greater positive impact on 2002. We anticipate significant growth in earnings during 2002, with net income per share reaching the range of $.92 to $.94 per diluted share for the full year."
Non-interest income rose 22 percent to $2.8 million for the fourth quarter of 2001, compared to $2.3 million in the like quarter last year. Increased service charges and fees contributed to the improvement.
Non-interest income for 2001 improved 27 percent to $11.5 million compared to $9.1 million in 2000.
VIB Corp.'s revenues (net interest income before provision for credit losses plus non-interest income) increased 5 percent to $15.1 million in the quarter compared to $14.3 million in the like quarter a year ago. Revenues for 2001 grew 8 percent to $60 million compared to $55.4 million in the prior year.
"A number of actions were taken during 2001, especially in the third and fourth quarters to improve efficiencies and provide cost savings, including the dissolution of our mortgage-banking business, consolidation of our three subsidiary banks into one and simplification of our product line," said Kern. "These efforts are expected to translate into a bottom-line improvement of well over $1 million."
Non-interest expense for the fourth quarter was $10.3 million, down sequentially from $10.7 million in the third quarter of 2001. Non-interest expense was $9.9 million in the fourth quarter of 2000.
Total assets as of Dec. 31 increased 2 percent to $1.2 billion, compared to $1.1 billion on Dec. 31, 2000. Stockholder equity grew 15 percent to $81.7 million from $70.9 million a year earlier. Book value at Dec. 31 increased 14 percent to $6.26 per share from $5.48 per share a year earlier.
Net loans grew 2 percent to $837.8 million from $823.7 million a year ago. Deposits were $885.4 million compared to $910.2 million last year.
"We are continuing to build our loan portfolio with high-quality loans despite economic conditions," said Kern.
"Our core deposits continue to grow. However, because of the interest rate environment, we allowed the run-off of some high-cost CDs, which caused our total deposits to decline compared to last year. We have built more competitive pricing on deposits into our budget and expect moderate growth in the portfolio over 2002."
"During the third quarter we reported that a large loan representing approximately $9.4 million, was placed on non-performing status. Recovery, including interest, is in process for the fully secured loan. We expect the issue to be completely resolved during the first quarter of 2002. We have maintained consistent and conservative credit underwriting standards and overall our loan quality remains strong. We are continuing to build our allowance for loan losses to improve coverage and reserve ratios.
"We expect these ratios to improve significantly with the resolution of the large non-performing loan."
As of Dec. 31, the allowance for loan losses totaled $9.3 million, or 1.12 percent of loans and 54 percent of non-performing assets. A year ago the allowance was $8.3 million, or 1.01 percent of loans and 61 percent of non-performing assets.
Excluding intangible amortization and non-recurring expenses and gains, VIB Corp.'s efficiency ratio improved both sequentially and compared to year ago levels. It improved to 66.57 percent compared to 68.03 percent for the third quarter of 2001 and 67.25 percent in the fourth quarter a year ago.
For the quarter that ended Dec. 31, VIB Corp.'s annualized return on average equity was 12.52 percent, compared to 14.88 percent in the fourth quarter last year. The return on average assets was .88 percent for the quarter, compared to .91 percent in the quarter that ended Dec. 31, 2000. For the full year, return on average equity was 11.96 percent while return on average assets was 82 percent.