EX-99.1 2 a4754863ex991.txt PRESS RELEASE Exhibit 99.1 CORRECTING and REPLACING Temecula Valley Bancorp Inc. Announces Asset Growth, Increased Earnings TEMECULA, Calif.--(BUSINESS WIRE)--Oct. 29, 2004--In BW5006 issued Oct. 16, 2004: Please replace the release dated Oct. 16, 2004, with the following corrected version. The corrected release reads: TEMECULA VALLEY BANCORP INC. ANNOUNCES ASSET GROWTH, INCREASED EARNINGS Temecula Valley Bancorp Inc. (OTCBB:TMCV) has added an additional $300,000 to its reserve for loan losses as of September 30, 2004. "Upon further analysis, we decided to set aside an additional amount in the reserve for the third quarter due to strong loan growth," said Stephen H. Wacknitz. "Loan delinquency and problem assets continue to be very low, and the quality of our loan portfolio remains strong. We tend to be conservative bankers," he added, "and this move just illustrates our philosophy. We continue to monitor the economy, how it may impact us and make adjustments accordingly." Thus, for the quarter ending September 30, 2004, earnings were $2,374,362, a slight decrease from the $2,379,493 earned in the same period last year due to the increased loan loss provision. Net income for the nine months ending September 30, 2004 was $7,593,138 compared to $5,723,454 for the same period last year, a $1,869,684, or 32.7% increase. The return on average assets was 1.69% for the third quarter and 2.03% for the nine-month period, and the return on average equity was 24.61% for the third quarter and 29.21% for the nine-month period, all well above peer group averages. Total assets increased 45%, from $411,201,196 at September 30, 2003 to $595,246,198 at September 30, 2004. Loans increased 42%, with construction loans increasing 66%, real estate secured loans increasing 51%, and SBA loans increasing 32%. The large increase in construction loans was due to increased tract housing construction, the addition of the loan production office in San Rafael, and the general overall robust real estate market in Southern California. Federal funds sold increased from $6,220,000 to $26,900,000. The allowance for loan loss increased from $3,371,272 at September 30, 2003 to $5,351,737 at September 30, 2004, a 59% increase which set the allowance for loan loss as a percent of loans from 0.94% a year earlier to 1.06% at September 30, 2004. Net charge-offs were $641,096 for the first nine months of 2004, compared to $296,123 for the same period in 2003. Non-accrual loans (net of SBA guarantees) were $2,541,320 at September 30, 2004 compared to $1,043,668 at September 30, 2003. Other real estate owned (net of SBA guarantees) was $75,675 at September 30, 2004 compared to $697,786 at September 30, 2003. For the twelve-month period, fixed assets increased from $2,126,175 to $3,979,370 due to the addition of two full service offices and a few loan production offices. The SBA servicing assets increased due to SBA 7A loan sales in the secondary market. Deposits increased 45%, from $365,307,695 at September 30, 2003 to $528,691,420 at September 30, 2004. The continued expansion of existing branches, as well as various CD promotions and the two new branches have fueled the deposit growth. Deposit growth is expected to be sufficient in the future to fund loan growth. Junior subordinated debt securities increased $8,248,000 due to the net addition of $8,000,000 of trust preferred borrowing that was transferred to the Bank as tier one capital, and is considered tier one and tier two capital on a consolidated basis. Included in other liabilities is a $400,000 reserve for undisbursed loans, which was set up in September 2004. The related $400,000 expense is reflected in other expense. Shareholder equity increased from $27,226,703 at September 30, 2003 to $39,790,676 at September 30, 2004 due to net income and the exercise of stock options. The capital ratios remain strong, with the tier one leverage ratio of 9.32%, the tier one risk-based ratio of 9.47% and the total risk-based capital ratio of 11.70%, all continue to be easily above the minimums to qualify as "well capitalized." Temecula Valley Bank was established in 1996 and operates full service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido, Rancho Bernardo and El Cajon. Temecula Valley Bancorp was established in June 2002 and operates as a one-bank holding company for Temecula Valley Bank. As a Preferred Lender (PLP) since 1998, the locally owned and operated bank also has SBA loan production offices in Sherman Oaks, Fresno, Chico, Anaheim Hills, and Irvine, Calif.; Bellevue, Wash.; Gurnee, Ill.; Westlake, Ohio; Ocean City, N.J.; Tampa/St. Petersburg, Coral Springs, and Jacksonville, Fla.; and Atlanta. The Bancorp's common stock is traded over the counter with the stock symbol "TMCV.OB" and the bank's Internet website can be reached at www.temvalbank.com. Statements concerning future performance, developments, or events concerning expectations for growth and market forecasts, and any other guidance on future periods constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, the effect of interest rate changes, the ability to control costs and expenses, the impact of consolidation in the banking industry, financial policies of the United States government, and general economic conditions. Additional information on these and other factors that could affect financial results are included in the bank's Securities and Exchange Commission filings. TEMECULA VALLEY BANCORP INC. FINANCIAL DATA SEPTEMBER 2004 (all amounts in whole dollars except share and per share information) Increase Increase Sept. 30, Sept. 30, (Decrease) (Decrease) 2004 2003 ------------ ------------ ------------ ---------- ASSETS Cash and due from banks 10,362,018 11,792,957 (1,430,939) (12%) Federal funds sold 26,900,000 6,220,000 20,680,000 332% Securities available for sale - FRB/FHLB stock 2,125,500 962,200 1,163,300 121% Securities - held to maturity 0 0 0 0% Loans 505,368,986 356,827,716 148,541,270 42% Less allowance for loan losses (5,351,737) (3,371,272) 1,980,465 59% ------------ ------------ ------------ Loans, net 500,017,249 353,456,444 146,560,805 41% Bank premises and equipment, net 3,979,370 2,126,175 1,853,195 87% Other real estate owned, net 302,698 1,336,036 (1,033,338) (77%) SBA-loan servicing I/O strip receivable 23,644,223 18,883,704 4,760,519 25% SBA-loan servicing asset 7,709,287 5,571,993 2,137,294 38% Cash surrender value life insurance 9,494,528 4,723,133 4,771,395 101% Other Assets 10,711,325 6,128,554 4,582,771 75% ------------ ------------ ------------ 595,246,198 411,201,196 184,045,002 45% ============ ============ ============ LIABILITIES AND STOCKHOLDER EQUITY Demand deposits 138,303,661 108,136,339 30,167,322 28% Interest bearing deposits 390,387,759 257,171,356 133,216,403 52% ------------ ------------ ------------ Total deposits 528,691,420 365,307,695 163,383,725 45% Junior subordinated debt securities 20,620,000 12,372,000 8,248,000 67% Other liabilities 6,144,102 6,294,798 (150,696) (2%) ------------ ------------ ------------ Total liabilities 555,455,522 383,974,493 171,481,029 45% Stockholders' equity 39,790,676 27,226,703 12,563,973 46% ------------ ------------ ------------ 595,246,198 411,201,196 184,045,002 45% ============ ============ ============ 3 Mos 3 Mos 9 Mos 9 Mos Ended Ended Ended Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2004 2003 2004 2003 ---------- ---------- ----------- ----------- Interest income 8,783,386 6,367,114 23,390,660 17,491,132 Interest expense 1,750,845 1,219,119 4,369,049 3,679,435 ---------- ---------- ----------- ----------- Net interest income 7,032,541 5,147,995 19,021,611 13,811,697 Provision for loan losses 1,635,000 150,000 2,385,000 650,000 Other income 7,288,248 6,424,132 20,742,937 17,925,606 Other expense 8,665,678 7,399,214 24,517,997 21,405,457 ---------- ---------- ----------- ----------- Earnings before income taxes 4,020,111 4,022,913 12,861,551 9,681,846 Income taxes 1,645,749 1,643,420 5,268,413 3,958,392 ---------- ---------- ----------- ----------- Net earnings 2,374,362 2,379,493 7,593,138 5,723,454 ========== ========== =========== =========== Actual common shares outstanding at end of period 8,690,503 8,087,614 8,690,503 8,087,614 Average common shares outstanding 8,662,855 7,980,546 8,432,075 7,720,546 Average common shares & equivalents outstanding 9,481,185 8,925,436 9,335,237 8,656,638 Basic earnings per share 0.27 0.30 0.90 0.74 Diluted earnings per share 0.25 0.27 0.81 0.66 Return on average assets (annualized) 1.69% 2.35% 2.03% 2.06% Return on average equity (annualized) 24.61% 36.77% 29.21% 32.88% Efficiency ratio 60.51% 63.94% 61.66% 67.45% 9/30/2004 9/30/2003 ---------- ---------- Tier 1 leverage capital ratio 9.32% 8.86% Tier 1 risk-based capital ratio 9.47% 9.55% Total risk-based capital ratio 11.70% 11.29% Allowance for loan losses as a % of total loans 1.06% 0.94% Gross nonperforming assets as a % of total assets 1.71% 1.82% Net nonperforming assets as a % of total assets 0.44% 0.42% Net charge-offs (annualized) as a % of total loans 0.17% 0.11% Loan to deposit ratio 95.59% 97.68% All share and per share data adjusted for a two-for-one common stock split effective December 2003. CONTACT: Temecula Valley Bancorp Inc. Stephen H. Wacknitz, President/CEO 951-694-9940