Exhibit 10.35--Bonus Pool Arrangement


     Temecula Valley Bank ("Bank") has earmarked approximately 10% of the pre
     tax, pre bonus net income of Temecula Valley Bancorp Inc ("Company"),
     payable by the Bank, to pay annual incentive bonuses to certain officers of
     the Bank.

     Within the group entitled to participate in pool are the officers
     designated below as well as other officers of the Bank. The bonus paid to
     some officers is discretionary and for others, the amount is fixed in the
     Employment Agreement of the involved individual.

          For the year ended December 31, 2005, pursuant to the Employment
          Agreement of Stephen H. Wacknitz, CEO, President and Chairman of the
          Bank, he is entitled to receive 6% of the pre tax, pre bonus net
          income of the Company. For the year ended December 31, 2006, pursuant
          to his Employment Agreement, he is entitled to receive 5% of the pre
          tax, pre bonus net income of the Company.

          Pursuant to the Employment Agreement of William McGaughey, Executive
          Vice President/ Chief Operating Officer, he is entitled to receive the
          greater of $100,000 or 1.5% of the pre-tax net income of the Company,
          payable by the Bank.

          Upon the recommendation of the Executive Compensation Committee and
          approval by the Board of Directors, the following executives may
          receive an annual incentive bonus based upon performance:

          a.   James Andrews, Executive Vice President/Real Estate Industries
               Group
          b.   Donald A. Pitcher, Executive Vice President/Chief Financial
               Officer
          c.   Thomas Shepherd, Executive Vice President/Chief Credit Officer
          d.   Scott J. Word, Executive Vice President/ Senior Lending Officer