EX-99.1 2 a5254199-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 Temecula Valley Bank Announces 22% Increase in Third Quarter Earnings TEMECULA, Calif.--(BUSINESS WIRE)--Oct. 18, 2006--Temecula Valley Bancorp Inc. (NASDAQ:TMCV) announces a 22% increase in earnings for the quarter ending September 30, 2006. "We are very pleased with our continued strong financial performance," stated Stephen H. Wacknitz, Chairman of the Board, CEO and President. "Our third quarter profits were $4.0 million, a 22% increase from the $3.3 million earned in the same period last year. Net income for the first nine months of 2006 was $12.5 million, a 22% increase over the $10.2 million earned in the same period last year." Net interest income for the quarter ending September 30, 2006 was $15.6 million, a 38% increase from the $11.3 million earned in the same period last year. The increase was primarily due to the increase in loans outstanding. Return on average assets was 1.48% and return on average equity was 22.72% for the quarter ending September 30, 2006. For the first nine months of the year, the return on average assets was 1.72% and the return on average equity was 25.85%. "Based on our industry's historical performance this places us among the top performers in the country," stated Steve Wacknitz. Total assets were $1.14 billion at September 30, 2006, a 44% increase from $794.8 million at September 30, 2005. For the same period, loans increased 55%. "The increase in loans was due to continued strong lending activity in the markets we serve as well as adding new profit centers, including the SBA unguaranteed purchase program, whose outstanding loans have surpassed $100 million within the first six months of operation," stated Steve Wacknitz. The allowance for loan loss increased 41%, from $8.2 million at September 30, 2005 to $11.6 million at September 30, 2006. Net charge-offs were $111 thousand for the first nine months of 2005 and $168 thousand for the same period in 2006. Non-accrual loans (net of SBA guarantees) were $1.8 million at September 30, 2005 and $2.8 million at September 30, 2006. There was $1.5 million of other real estate owned (net of SBA guarantees) at September 30, 2005 compared to $973 thousand at September 30, 2006. Deposits increased 45% from $703.9 million at September 30, 2005 to $1.02 billion at September 30, 2006. The deposit growth has been fueled by existing branch growth, through various CD promotions, from money desk operations, and from our new Carlsbad and Solana Beach full service branches. Shareholder equity increased 35% from $53.9 million at September 30, 2005 to $73.0 million at September 30, 2006, due primarily to net income and the exercise of stock options. Capital ratios remain strong at September 30, 2006, with the tier one leverage ratio at 8.94%, the tier one risk-based ratio at 8.31% and the total risk-based capital ratio at 10.69% all above the minimum to qualify as "well capitalized." During the third quarter of 2006, $12 million of junior subordinated debt securities were issued, of which $11.5 million was transferred to Temecula Valley Bank as tier one capital. "With the recent trends in the California real estate market the Bank remains strong with 95% of its loans secured by real estate with an overall loan to value of 65%. Additionally, we believe that other major economic indicators in California remain strong," stated Steve Wacknitz. Temecula Valley Bank was established in 1996 and operates full service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido, Rancho Bernardo, El Cajon, Carlsbad and Solana Beach. The Bank also operates a number of regional real estate loan production centers in California. As a nationally authorized SBA Preferred Lender, the locally owned and operated Bank has multiple SBA loan production offices across the United States and has funded over a billion dollars in SBA loans in 33 states in the last five years. The Bank's website is at www.temvalbank.com. Temecula Valley Bancorp was established in June 2002 and operates as a bank holding company for the Bank. Temecula Valley Bancorp stock is traded on the NASDAQ Global Select Market under the symbol TMCV. 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 filings made with Securities and Exchange Commission by Temecula Valley Bancorp Inc. TEMECULA VALLEY BANCORP INC. FINANCIAL DATA SEPTEMBER 2006 (UNAUDITED) (all amounts in whole dollars except share and per share information) Sept 30, Sept 30, Increase Increase 2006 2005 (Decrease) (Decrease) -------------- ------------ ------------ ---------- ASSETS Cash and due from banks 16,453,334 12,666,220 3,787,114 30% Due from Banks- Time 99,000 0 99,000 0% Federal funds sold 4,350,000 32,240,000 (27,890,000) (87%) Loans 1,061,515,364 686,377,936 375,137,428 55% Less allowance for loan losses (11,631,171) (8,240,198) (3,390,973) 41% -------------- ------------ ------------ Loans, net 1,049,884,193 678,137,738 371,746,455 55% Federal Reserve & Home Loan Bank stock, at cost 1,969,000 2,867,600 (898,600) (31%) Other real estate owned, net 2,130,500 2,111,250 19,250 1% Bank premises and equipment, net 5,171,998 4,745,390 426,608 9% SBA-loan servicing asset 8,402,234 8,059,947 342,287 4% SBA-loan servicing I/O strip receivable 14,883,673 22,513,631 (7,629,958) (34%) Cash surrender value life insurance 22,316,484 17,392,824 4,923,660 28% Other Assets 18,310,946 14,097,984 4,212,962 30% -------------- ------------ ------------ 1,143,971,362 794,832,584 349,138,778 44% ============== ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits 155,444,790 153,506,186 1,938,604 1% Interest bearing deposits 862,010,600 550,375,133 311,635,467 57% -------------- ------------ ------------ Total deposits 1,017,455,390 703,881,319 313,574,071 45% Junior subordinated debt securities 41,240,000 28,868,000 12,372,000 43% Other liabilities 12,315,798 8,128,992 4,186,806 52% -------------- ------------ ------------ Total liabilities 1,071,011,188 740,878,311 330,132,877 45% Stockholders' equity 72,960,174 53,954,273 19,005,901 35% -------------- ------------ ------------ 1,143,971,362 794,832,584 349,138,778 44% ============== ============ ============ 3 Mos. 3 Mos. 9 Mos. 9 Mos. Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Interest income 25,201,017 15,351,569 66,533,057 40,216,507 Interest expense 9,608,106 4,051,121 23,035,068 9,608,558 ----------- ----------- ----------- ----------- Net interest income 15,592,911 11,300,448 43,497,989 30,607,949 Provision for loan losses 1,350,000 346,000 2,760,000 1,988,900 Other income 4,332,786 5,599,165 15,748,577 18,847,475 Other expense 11,603,993 10,950,340 34,734,842 29,967,152 ----------- ----------- ----------- ----------- Earnings before income taxes 6,971,704 5,603,273 21,751,724 17,499,372 Income taxes 2,953,999 2,318,111 9,223,718 7,269,489 ----------- ----------- ----------- ----------- Net earnings 4,017,705 3,285,162 12,528,006 10,229,883 =========== =========== =========== =========== Actual common shares outstanding at end of period 9,169,088 8,879,697 9,169,088 8,879,697 Average common shares outstanding 9,149,922 8,870,793 9,044,249 8,829,197 Average common shares & equivalents outstanding 9,742,530 9,659,261 9,611,518 9,562,584 Basic earnings per share 0.44 0.37 1.39 1.16 Diluted earnings per share 0.41 0.34 1.30 1.07 Return on average assets (annualized) 1.48% 1.72% 1.72% 1.96% Return on average equity (annualized) 22.72% 24.97% 25.85% 28.28% Efficiency ratio 58.24% 64.80% 58.63% 60.59% 09/30/2006 09/30/2005 ----------- ----------- Tier 1 leverage capital ratio 8.94% 9.34% Tier 1 risk-based capital ratio 8.31% 9.04% Total risk-based capital ratio 10.69% 11.45% Allowance for loan losses as a % of total loans 1.10% 1.20% Gross nonperforming assets as a % of total assets 1.21% 1.15% Net nonperforming assets as a % of total assets 0.33% 0.41% Net charge-offs (annualized) as a % of total loans 0.02% 0.02% Loan to deposit ratio 104.33% 97.51% Book value per share 7.96 6.08 PAST DUE AND NON-ACCRUAL LOANS ---------------------------------- ----------------------------------- Sept 30, 2006 Gross Government Net Balance Guaranty Balance ---------------------------------- ----------------------------------- 30-89 days past due 379,985 (160,617) 219,368 =========== ============ ========== 90+ days past due and accruing 0 0 0 Non-accrual 11,669,599 (8,858,481) 2,811,118 Other real estate owned (REO) 2,130,500 (1,157,924) 972,576 ----------- ------------ ---------- Total nonperforming assets 13,800,099 (10,016,405) 3,783,694 =========== ============ ========== Sept 30, 2005 ---------------------------------- 30-89 days past due 1,383,506 (1,176,386) 207,120 =========== ============ ========== 90+ days past due and accruing 0 0 0 Non-accrual 7,029,016 (5,247,485) 1,781,531 Other real estate owned (REO) 2,111,250 (604,004) 1,507,246 ----------- ------------ ---------- Total nonperforming assets 9,140,266 (5,851,489) 3,288,777 =========== ============ ========== NET LOAN CHARGE-OFFS ------------------------------- 3 Mos. 3 Mos. 9 Mos. 9 Mos. Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 2006 2005 2006 2005 --------- -------- --------- --------- Charge-offs 60,713 25,709 356,594 430,534 Recoveries (171,785) (80,727) (188,611) (319,298) --------- -------- --------- --------- Net Charge-offs (Recoveries) (111,072) (55,018) 167,983 111,236 ========= ======== ========= ========= TEMECULA VALLEY BANCORP INC. FINANCIAL DATA SEPTEMBER 2005 (UNAUDITED) (all amounts in whole dollars except share and per share information) Sept 30, Sept 30, Increase Increase 2005 2004 (Decrease) (Decrease) ------------ ------------ ------------ ---------- ASSETS Cash and due from banks 12,666,220 10,362,018 2,304,202 22% Federal funds sold 32,240,000 26,900,000 5,340,000 20% Securities - held to maturity 0 0 0 0% Loans 686,377,936 505,368,986 181,008,950 36% Less allowance for loan losses (8,240,198) (5,351,737) 2,888,461 54% ------------ ------------ ------------ Loans, net 678,137,738 500,017,249 178,120,489 36% Federal Reserve &Home Loan Bank stock, at cost 2,867,600 2,125,500 742,100 35% Other real estate owned, net 2,111,250 302,698 1,808,552 597% Bank premises and equipment, net 4,745,390 3,979,370 766,020 19% SBA-loan servicing I/O strip receivable 22,513,631 23,644,223 (1,130,592) (5%) SBA-loan servicing asset 8,059,947 7,709,287 350,660 5% Cash surrender value life insurance 17,392,824 9,494,528 7,898,296 83% Other Assets 14,097,984 10,711,325 3,386,659 32% ------------ ------------ ------------ 794,832,584 595,246,198 199,586,386 34% ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits 153,506,186 138,303,661 15,202,525 11% Interest bearing deposits 550,375,133 390,387,759 159,987,374 41% ------------ ------------ ------------ Total deposits 703,881,319 528,691,420 175,189,899 33% FHLB advances 0 0 0 0% Junior subordinated debt securities 28,868,000 20,620,000 8,248,000 40% Other liabilities 8,128,992 6,144,102 1,984,890 32% ------------ ------------ ------------ Total liabilities 740,878,311 555,455,522 185,422,789 33% Stockholders' equity 53,954,273 39,790,676 14,163,597 36% ------------ ------------ ------------ 794,832,584 595,246,198 199,586,386 34% ============ ============ ============ 3 Mos. 3 Mos. 9 Mos. 9 Mos. Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Interest income 15,351,569 8,783,386 40,216,507 23,390,660 Interest expense 4,051,121 1,750,845 9,608,558 4,369,049 ----------- ----------- ----------- ----------- Net interest income 11,300,448 7,032,541 30,607,949 19,021,611 Provision for loan losses 346,000 1,635,000 1,988,900 2,385,000 Other income 5,599,165 7,288,248 18,847,475 20,742,937 Other expense 10,950,340 8,665,678 29,967,152 24,517,997 ----------- ----------- ----------- ----------- Earnings before income taxes 5,603,273 4,020,111 17,499,372 12,861,551 Income taxes 2,318,111 1,645,749 7,269,489 5,268,413 ----------- ----------- ----------- ----------- Net earnings 3,285,162 2,374,362 10,229,883 7,593,138 =========== =========== =========== =========== Actual common shares outstanding at end of period 8,879,697 8,690,503 8,879,697 8,690,503 Average common shares outstanding 8,870,793 8,662,855 8,829,197 8,432,075 Average common shares & equivalents outstanding 9,659,261 9,481,185 9,562,584 9,335,237 Basic earnings per share 0.37 0.27 1.16 0.90 Diluted earnings per share 0.34 0.25 1.07 0.81 Return on average assets (annualized) 1.72% 1.69% 1.96% 2.03% Return on average equity (annualized) 24.97% 24.61% 28.28% 29.21% Efficiency ratio 64.80% 60.51% 60.59% 61.66% 9/30/2005 9/30/2004 ----------- ----------- Tier 1 leverage capital ratio 9.34% 9.32% Tier 1 risk-based capital ratio 9.04% 9.47% Total risk-based capital ratio 11.45% 11.70% Allowance for loan losses as a % of total loans 1.20% 1.06% Gross nonperforming assets as a % of total assets 1.15% 1.71% Net nonperforming assets as a % of total assets 0.41% 0.44% Net charge-offs (annualized) as a % of total loans 0.02% 0.17% Loan to deposit ratio 97.51% 95.59% Book value per share 6.08 4.58 PAST DUE AND NON-ACCRUAL LOANS ----------------------------------- ---------------------------------- Gross Government Net Balance Guaranty Balance ---------------------------------- Sept 30, 2005 ----------------------------------- 30-89 days past due 1,383,506 (1,176,386) 207,120 =========== =========== ========== 90+ days past due and accruing 0 0 0 Non-accrual 7,029,016 (5,247,485) 1,781,531 Other real estate owned (REO) 2,111,250 (604,004) 1,507,246 ----------- ----------- ---------- Total nonperforming assets 9,140,266 (5,851,489) 3,288,777 =========== =========== ========== Sept 30, 2004 ----------------------------------- 30-89 days past due 862,778 (663,177) 199,601 =========== =========== ========== 90+ days past due and accruing 0 0 0 Non-accrual 9,868,931 (7,327,611) 2,541,320 Other real estate owned (REO) 302,698 (227,023) 75,675 ----------- ----------- ---------- Total nonperforming assets 10,171,629 (7,554,634) 2,616,995 =========== =========== ========== NET LOAN CHARGE-OFFS --------------------------------- 3 Mos. 3 Mos. 9 Mos. 9 Mos. Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 2005 2004 2005 2004 -------- -------- --------- -------- Charge-offs 25,709 328,656 430,534 649,737 Recoveries (80,727) (1,688) (319,298) (8,641) -------- -------- --------- -------- Net Charge-offs (Recoveries) (55,018) 326,968 111,236 641,096 ======== ======== ========= ======== CONTACT: Temecula Valley Bank Stephen H. Wacknitz, 951-694-9940