Exhibit 99.1
Temecula Valley Bancorp Announces 2007 Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--Temecula Valley Bancorp Inc. (NASDAQ:TMCV) today announced earnings for the year and fourth quarter ending December 31, 2007. Net income for 2007 was $15.7 million, down 7.1 percent from the $16.9 million reported for 2006; diluted earnings per share were $1.46 compared with $1.73 for the prior year, a decline of 15.6 percent. Fourth quarter 2007 net income was $3.70 million, a 15.7 percent decline from the $4.39 million reported for the fourth quarter of 2006. Diluted earnings per share were $0.36 compared with $0.43 for the year-ago fourth quarter, down 16.3 percent. Fourth quarter and full-year 2007 results reflect from the combined impact of a lower net interest margin, an increase in the loan loss provision, and a lower level of noninterest income.
Per share earnings for 2007 were diluted by the private placement of 1.4 million common shares in November 2006; the impact was partially offset by the repurchase of 684,100 shares during the second and third quarters of 2007. The average number of shares and equivalents outstanding increased by 9.9 percent for the year, and was unchanged at 10.3 million shares in the quarter-over-quarter comparison.
Highlights include:
- Net interest income for the year ended December 31, 2007 increased by $5.9 million above 2006. A higher level of earning assets was partially offset by a 101 basis point decline in the net interest margin, to 5.36 percent.
- Noninterest income was $16.4 million for 2007, a decline of $3.1 million from the prior year, resulting from a lower gain on loan sales and reduced SBA servicing income. Excluding the non-cash fair market valuation adjustment of the SBA servicing asset, pro forma noninterest income for 2007 and 2006 would be $27.8 million and $31.1 million, respectively.
- Twelve-month 2007 loan growth was $95.0 million or 8 percent. SBA loans, up 31 percent, replaced the lower level of construction and development (C&D) loans in Temecula’s loan portfolio; C&D outstandings grew 3 percent year over year.
- SBA loan production reached a record level in 2007, up $140 million or 39 percent above 2006, to $496 million. The SBA product mix is also shifting toward 504 loans which remain in the portfolio, generating interest income for a longer period of time.
- Lower-cost Money Market and NOW accounts increased 12 percent during the year. However, the Bank continues to fund its transactional businesses, namely, construction and SBA lending, with time deposits.
- Net nonperforming assets increased to 1.56 percent of total assets as a result of increasing weakness in the economy and real estate markets. However, net charge-offs as a percentage of total loans still remain consistent with prior years’ experience at 0.09 percent.
- During the second and third quarters of 2007, Temecula’s board of directors authorized a stock buyback program to purchase up to $15.5 million of TMCV common stock; 684,100 shares were repurchased during the second and third quarters.
Chairman, President, and CEO Stephen H. Wacknitz commented, “We have been operating in a difficult environment throughout 2007. The shift in our economy and in our residential real estate market has been a challenge for homebuyers, for builders, and not least of all, for bankers. Given the current economic conditions, we have the resources to shift our focus from C&D lending to one or more of our other business lines. We had a record year in SBA loan originations, which provide us with great flexibility to sell or retain. Also, our commercial real estate lending opportunities remain attractive.”
Returns on average assets and average equity were 1.21 percent and 14.72 percent, respectively, for the year ended December 31, 2007, compared to 1.64 percent and 23.89 percent, respectively, for the prior year.
Income Statement
Total revenue, consisting of net interest income and noninterest income, was $82.0 million for 2007 compared with $79.2 million for 2006, an increase of 3.5 percent. Net interest income for 2007 was $65.6 million, up 9.7%, compared with $59.8 million for the prior year. The increase was due to the combined impact of an increase in average earning assets, partially offset by a 101 basis point, or 15.9 percent, decline in the net interest margin, to 5.36 percent.
For the fourth quarter of 2007, net interest income was $15.8 million compared with $16.3 million for the prior-year fourth quarter, a decrease of 3.1 percent; this reflects a 7.22 percent increase in average earning assets, partially offset by a 76 basis point, or 13.1 percent, decline in net interest margin, to 5.03 percent. Compared with the third quarter of 2007, net interest income declined 4.3 percent from a combination of margin decline (35 basis points) and a 1.2 percent increase in average earning assets. The quarterly decline in the 2007 net interest margin reflects a declining loan yield partially offset by the slower decline in the rates for interest-bearing deposits. Mr. Wacknitz commented, “We are an asset-sensitive organization, and anticipate that in the short run, we will experience margin compression from declining interest rates. However, most of our interest-bearing deposits reprice within six months which stabilize our net interest margin within that timeframe.”
Noninterest income was $16.4 million for 2007, a decline of $3.0 million or 15.5 percent from the $19.4 million reported for 2006. Temecula’s noninterest income stream has several unique qualities by virtue of Temecula’s business strategy and the current market environment. Except for construction loans, which it retains, Temecula structures most of its real estate and SBA loans to sell into the secondary markets, generating gains on sale and providing liquidity and/or opportunities for balance sheet management.
Gains on the sale of loans are a normal recurring element of operations. Temecula has increased the volume of SBA 7(a) loans generated in 2007 to offset the declining level of construction loans in its California marketplace. Gains have declined as a result of the lower volume of SBA 7(a) loans sold this past year, as well as from a lower level of SBA 7(a) premiums received from the secondary market. Higher level of interest income derived from its loan portfolio has offset the reduced gain on sale of loans. For 2007, gains on loan sales were $10.1 million compared with $13.2 million in 2006, down $3.1 million or 23.5 percent, year-over-year. Likewise, fourth quarter 2007 gains of $1.7 million declined 25.7 percent or $0.6 million from the prior-year fourth quarter.
According to Mr. Wacknitz, “One of the strengths of Temecula is the variety of instruments, enhancements, and strategies we have at our disposal to manage our performance through different economic and banking cycles. As construction lending declines, we have a network of SBA lenders positioned throughout the country to fill our pipeline, as well as strong commercial real estate lending opportunities throughout the state. While these other business lines are less profitable than construction lending, we prefer to maintain our conservative underwriting standards and forgo a measure of current profit until the construction markets return to a healthier state.”
A second area of Temecula’s noninterest income is derived from SBA servicing, which has two components, namely, the cash servicing fee received which is based on the size of the SBA portfolio serviced and the servicing rate and the adjustment to the fair value of the servicing assets resulting from changes in the balances and servicing rates of the underlying servicing portfolio and changes in the market assumptions for future prepayment speeds and discount rates. Beginning in the fourth quarter of 2004, Temecula began to retain less of the SBA loan servicing rights to reduce the volatility of prepayment and valuation risks associated with the servicing assets. The SBA requires that the originating lender retain a minimum of one percent in fees, so the current decline in the weighted average servicing rate was anticipated, and will continue to reduce to one percent as loans originated prior to the fourth quarter of 2004 pay down.
For 2007, the net servicing loss derived from the combination of these factors was $4.3 million, including a cash servicing fee of $7.1 million, which was more than offset by the $11.4 million non-cash decline in the valuation of the servicing portfolio; the magnitude of this valuation swing reflects the volatility in the credit markets during 2007; in 2006, by comparison, accelerated prepayments had the largest impact on the servicing portfolio’s valuation. The table below provides a breakout of the 2007 and 2006 fourth quarter and full year inputs to this calculation:
(dollars in thousands) | 4th Qtr, 2007 | 4th Qtr, 2006 | 12 mos. 2007 | 12 mos. 2006 | ||||
SBA Loans Serviced | $374,395 | $399,900 | $374,395 | $399,900 | ||||
Reported Value of the SBA Servicing Assets | $11,949 | $21,503 | $11,949 | $21,503 | ||||
P&L Servicing Income (Loss) | $513 | ($1,095) | ($4,305) | ($2,615) | ||||
Adjustment to Fair Value of SBA Servicing Asset | ($1,149) | ($3,146) | ($11,442) | ($11,692) | ||||
Cash Servicing Received, per P&L | $1,662 | $2,051 | $7,137 | $9,077 | ||||
Weighted Average Servicing Rate | 1.69% | 2.01% | 1.69% | 2.01% |
Historically, noninterest income has behaved in a randomly volatile manner, reflecting the independent factors that determine the valuation of the servicing rights portfolio on a GAAP basis. Noninterest income for 2007 was $16.4 million, including $10.1 million in gains from the sale of loans, a $3.1 million decline from the $13.2 million reported in the previous year. The decrease was due to a decline in the number of loans sold and the decline in premiums for SBA 7(a) loans.
Excluding the non-cash contribution from noninterest income on a pro forma basis normalizes the income contribution from loan servicing. For 2007 and 2006, for example, pro forma noninterest income for 2007 and 2006 would be $27.8 million and $31.1 million, respectively, excluding the non-cash valuation swings of ($11.4) million in 2007 and ($11.7) million in 2006. On an after-tax basis, earnings would increase by $6.6 million and $6.8 million, respectively.
The provision for loan losses was $3.6 million for 2007, compared with $3.7 million reported for 2006. The provision increased the allowance for loan losses as a percent of total loans to 1.21 percent from 1.10 percent at December 31, 2006, reflecting the increasing weakness in the economy and the real estate industry. Excluding held-for-sale loans the allowance for loan losses as a percent of loans was 1.46 percent and 1.29 percent at December 31, 2007 and 2006, respectively.
2007 noninterest expense was $51.9 million, an increase of $4.9 million or 10.5 percent, above the $47.0 million reported for 2006. Fourth quarter noninterest expense was $12.3 million, similar to the $12.3 million reported for the year-ago quarter, and a $0.4 million decline from third quarter 2007. Salary and benefits expenses accounted for $0.3 million of the linked quarter decrease, primarily from lower bonus accruals due to lower earnings for the quarter. For the fourth quarter 2007, the efficiency ratio decreased to 59.56 percent from 70.09 percent in the third quarter of 2007, primarily due to increased noninterest income.
Balance Sheet
Total assets were $1.32 billion at December 31, 2007, up $80.9 million or 7 percent from the $1.24 billion reported at December 31, 2006. Compared with the linked quarter, assets increased $14.2 million or 1.1 percent; loan growth was funded through the conversion of fed funds and issuance of time deposits.
Temecula remains solidly entrenched in real estate lending, with approximately 92.9 percent of loans collateralized by real property. Construction lending is the bank’s major focus, accounting for 47.4 percent of its 2007 loan portfolio. Growth in construction lending has slowed substantially from 2006, with C&D loans increasing by $18.7 million or 3.0 percent since 2006 year-end. SBA 7(a) loans have taken up much of the slack, increasing by $68.0 million or 31 percent during 2007. SBA 7(a) loans now account for 23.1 percent of total loans, up from 19.1 percent at December 31, 2006. Mr. Wacknitz noted, “Production of SBA loans was strong in 2007, and in fact, total originations were higher than last year. Our SBA department originated $496 million for the year ended December 31, 2007 compared to $356 million for the prior year, up $140 million or 39.3 percent; this excludes loans purchased through our unguaranteed purchase program. However, our SBA production mix is changing gradually due to the impact of the inverted yield curve and increasing competition. As a result, we have been transitioning from being primarily an SBA 7(a) lender toward a higher concentration of SBA 504 and other commercial real estate loans that can be sold in the secondary market. SBA 504 loans have more of a construction component, so we hold these loans on our balance sheet longer until completion, resulting in greater interest income and higher concentrations of owner-occupied construction loans.”
The loans held in Temecula’s portfolio are diversified geographically and by type of loan. Approximately 23.5 percent of loans are located outside of California through various SBA programs; these are all commercial in nature, and virtually all are owner-occupied, divided between non-construction CRE ($24.4 million) and commercial construction ($56.7 million), SBA 7(a) ($84.9 million), and unguaranteed purchase program ($124.8 million).
Deposits at December 31, 2007 were $1.16 billion, an increase of $79.6 million or 7.0 percent from $1.08 billion at December 31, 2006. Lower-cost Money Market and NOW accounts were up $15.9 million or 12.0 percent. Time deposits were up $76.0 million or 10 percent. The increase in Money Market and NOW accounts and time deposits was offset by a decline in noninterest-bearing deposits of $10.7 million or 7 percent.
Asset Quality
Gross nonperforming assets were $30.9 million or 2.35 percent of total assets at December 31, 2007 up from $20.5 million or 1.66 percent of total assets at December 31, 2006. The nonperforming assets supported by government guarantees were $10.4 million and $11.0 million for December 31, 2007 and 2006, respectively. Despite a growing level of net nonperforming loans, net loan charge-offs remain low, totaling 0.09 percent of total loans for the year. Mr. Wacknitz added, “The majority of nonperforming assets are SBA loans, which represent $14.1 million of the net exposure. The remaining $6.4 million of conventional non-accrual loans consists of five loans. One is a $3.1 million construction loan for 25 single family residences located in Victorville, CA. Ten homes have sold and closed escrow and there are five homes in escrow. The remaining 10 homes are completed and unsold. We feel that there is approximately $470,000 in loss exposure on the Victorville project. The other is a land development loan for $2.2 million located in Folsom, CA, where we do not anticipate a loss.” At December 31, 2007, the allowance for loan losses was 1.21 percent of total loans, up from 1.10 percent at December 31, 2006. Excluding held-for-sale loans the allowance for loan losses as a percent of loans was 1.46 percent and 1.29 percent at December 31, 2007 and 2006, respectively.
Shareholder Equity
Shareholder equity increased 5.0 percent from $103.3 million at December 31, 2006 to $108.5 million at December 31, 2007; the majority of the growth was attributable to earnings and the exercise of stock options, which was offset by the repurchase of shares. At December 31, 2007, the Company had 10,147,910 shares outstanding, net of the 684,100 shares repurchased in second and third quarter under the stock repurchase program. Capital ratios remain strong at December 31, 2007, with the Tier 1 leverage ratio at 10.68 percent, the Tier 1 risk-based capital ratio at 9.70 percent, and the total risk-based capital ratio at 10.77 percent, all above the minimum to qualify as “well capitalized.”
Mr. Wacknitz concluded, “We believe that the geographical diversity of our markets, our ability to identify opportunities and manage risk, and the entrepreneurial capabilities of our people to bring it all together, will lead us to new opportunities for profitable growth, and make us a stronger organization.”
About the Company
Temecula Valley Bank, established in 1996, operates eleven full-service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido, Rancho Bernardo, El Cajon, Carlsbad, Solana Beach, Ontario, and San Marcos. The Bank also operates a number of regional real estate loan production centers in California. As a leading SBA Preferred Lender, the Bank has a network of SBA loan production offices across the United States. Temecula Valley Bancorp was established in June 2002 and operates as a bank holding company for the Bank. For further information, please go to the Bank’s website at www.temvalbank.com.
Temecula Valley Bancorp stock is traded on the NASDAQ Global Select Market under the symbol TMCV.
Forward-Looking Statements
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 U.S. government, and general economic conditions. Additional information on these and other factors that could affect financial results are included in the filings made with the Securities and Exchange Commission by Temecula Valley Bancorp Inc. The Corporation undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.
TEMECULA VALLEY BANCORP INC. | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
(in thousands except share and per share data) | |||||||||||||||||||
Dec. 31, 2007 | Dec. 31, 2006 | $ Change | % Change | ||||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 13,210 | $ | 15,190 | (1,980 | ) |
| (13 | %) | ||||||||||
Interest-bearing deposits in financial institutions | 1,000 | 99 | 901 | 910 | % | ||||||||||||||
Federal funds sold | 4,220 | 18,180 | (13,960 | ) | (77 | %) | |||||||||||||
Securities | 2,981 | 1,019 | 1,962 | 193 | % | ||||||||||||||
Loans (Including HFS) | |||||||||||||||||||
Commercial | 68,661 | 59,550 | 9,111 | 15 | % | ||||||||||||||
Real Estate-Construction | 586,906 | 568,227 | 18,679 | 3 | % | ||||||||||||||
Real Estate | 292,153 | 292,827 | (674 | ) | (0 | %) | |||||||||||||
SBA | 286,367 | 218,408 | 67,959 | 31 | % | ||||||||||||||
Consumer and other | 3,630 | 3,681 | (51 | ) | (1 | %) | |||||||||||||
Total Gross Loans | 1,237,717 | 1,142,693 | 95,024 | 8 | % | ||||||||||||||
Less allowance for loan losses | (15,022 | ) | (12,522 | ) | (2,500 | ) | 20 | % | |||||||||||
Total Loans, net | 1,222,695 | 1,130,171 | 92,524 | 8 | % | ||||||||||||||
Federal Home Loan Bank stock, at cost | 2,905 | 1,996 | 909 | 46 | % | ||||||||||||||
Bank premises and equipment, net | 5,271 | 5,492 | (221 | ) | (4 | %) | |||||||||||||
Other real estate owned, net | 0 | 1,255 | (1,255 | ) | (100 | %) | |||||||||||||
Cash surrender value life insurance | 28,034 | 24,036 | 3,998 | 17 | % | ||||||||||||||
SBA-loan servicing asset | 5,350 | 8,288 | (2,938 | ) | (35 | %) | |||||||||||||
SBA-loan I/O strip receivable | 6,599 | 13,215 | (6,616 | ) | (50 | %) | |||||||||||||
Accrued interest | 6,827 | 6,155 | 672 | 11 | % | ||||||||||||||
Other Assets | 20,018 | 13,093 | 6,925 | 53 | % | ||||||||||||||
Total Assets | $ | 1,319,110 | $ | 1,238,189 | 80,921 | 7 | % | ||||||||||||
LIABILITIES AND STOCKHOLDER EQUITY | |||||||||||||||||||
Deposits | |||||||||||||||||||
Noninterest-Bearing Deposits | 133,867 | 144,525 | (10,658 | ) | (7 | %) | |||||||||||||
Money Market & NOW | 146,270 | 130,357 | 15,913 | 12 | % | ||||||||||||||
Savings | 28,059 | 29,781 | (1,722 | ) | (6 | %) | |||||||||||||
Time Deposits | 852,875 | 776,838 | 76,037 | 10 | % | ||||||||||||||
Total deposits | 1,161,071 | 1,081,501 | 79,570 | 7 | % | ||||||||||||||
Junior subordinated debt securities | 34,023 | 41,240 | (7,217 | ) | (18 | %) | |||||||||||||
Accrued interest | 2,329 | 2,094 | 235 | 11 | % | ||||||||||||||
Dividend Payable | 406 | 0 | 406 | 100 | % | ||||||||||||||
Other liabilities | 12,737 | 10,091 | 2,646 | 26 | % | ||||||||||||||
Total liabilities | 1,210,566 | 1,134,926 | 75,640 | 7 | % | ||||||||||||||
Stockholder's equity | 108,544 | 103,263 | 5,281 | 5 | % | ||||||||||||||
Total Liabilities and Stockholder's equity | $ | 1,319,110 | $ | 1,238,189 | $ | 80,921 | 7 | % | |||||||||||
SELECTED BALANCE SHEET DATA | |||||||||||||||||||
Book value per share, end of period | $ | 10.70 | $ | 9.75 | |||||||||||||||
Tier 1 leverage capital ratio | 10.68 | % | 11.42 | % | |||||||||||||||
Tier 1 risk-based capital ratio | 9.70 | % | 10.49 | % | |||||||||||||||
Total risk-based capital ratio | 10.77 | % | 11.90 | % | |||||||||||||||
Loan to deposit ratio, end of period | 106.60 | % | 105.66 | % | |||||||||||||||
Allowance for loan losses as a % of total loans | 1.21 | % | 1.10 | % | |||||||||||||||
Allowance - net of held-for-sale loans | 1.46 | % | 1.29 | % | |||||||||||||||
Gross nonperforming assets as a % of total assets | 2.35 | % | 1.66 | % | |||||||||||||||
Net nonperforming assets as a % of total assets | 1.56 | % | 0.77 | % | |||||||||||||||
Net charge-offs as a % of total loans | 0.09 | % | 0.01 | % |
PAST DUE AND NON-ACCRUAL LOANS | |||||||||
December 31, 2007 | Gross Balance | Government Guaranty | Net Balance | ||||||
30 - 89 days past due | 11,547 | (2,732 | ) | 8,815 | |||||
90+ days past due and accruing | 0 | 0 | 0 | ||||||
Non-accrual | 30,936 | (10,379 | ) | 20,557 | |||||
Other real estate owned (REO) | 0 | 0 | 0 | ||||||
Total nonperforming assets | 30,936 | (10,379 | ) | 20,557 | |||||
December 31, 2006 | |||||||||
30 - 89 days past due | 3,284 | (1,737 | ) | 1,547 | |||||
90+ days past due and accruing | 140 | 0 | 140 | ||||||
Non-accrual | 19,124 | (10,335 | ) | 8,789 | |||||
Other real estate owned (REO) | 1,255 | (638 | ) | 617 | |||||
Total nonperforming assets | 20,519 | (10,973 | ) | 9,546 |
TEMECULA VALLEY BANCORP INC. | |||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
(in thousands except share and per share data) | |||||||||||||||||
3 Mos. Ended December 31, | 12 Mos. Ended December 31, | ||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||
INTEREST INCOME | |||||||||||||||||
Interest income and fees on loans | $ | 28,129 | $ | 27,473 | $ | 114,190 | $ | 93,378 | |||||||||
Other Interest income | 165 | 223 | 1,425 | 851 | |||||||||||||
Total Interest income | 28,294 | 27,696 | 115,615 | 94,229 | |||||||||||||
INTEREST EXPENSE | |||||||||||||||||
Interest on deposits | 11,752 | 10,595 | 46,992 | 31,715 | |||||||||||||
Interest on junior subordinated debt and other borrowings | 729 | 819 | 2,991 | 2,734 | |||||||||||||
Total Interest expense | 12,481 | 11,414 | 49,983 | 34,449 | |||||||||||||
Net interest income | 15,813 | 16,282 | 65,632 | 59,780 | |||||||||||||
Provision for loan losses | 2,130 | 890 | 3,600 | 3,650 | |||||||||||||
Net interest income after provision for loan losses | 13,683 | 15,392 | 62,032 | 56,130 | |||||||||||||
NONINTEREST INCOME | |||||||||||||||||
Service charges and fees | 150 | 155 | 604 | 618 | |||||||||||||
Gain on sale of loans, fixed assets and OREO | 1,730 | 2,327 | 10,099 | 13,232 | |||||||||||||
SBA Net Servicing income | 513 | (1,095 | ) | (4,305 | ) | (2,615 | ) | ||||||||||
Loan related income | 1,886 | 1,838 | 7,824 | 6,530 | |||||||||||||
Other income | 534 | 470 | 2,166 | 1,679 | |||||||||||||
Total Noninterest income | 4,813 | 3,695 | 16,388 | 19,444 | |||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||
Salaries and employee benefits | 7,483 | 8,149 | 33,557 | 31,989 | |||||||||||||
Occupancy and equipment | 1,280 | 1,283 | 5,148 | 4,754 | |||||||||||||
Marketing and business promotion | 283 | 289 | 1,176 | 971 | |||||||||||||
Office expense | 629 | 720 | 2,640 | 2,596 | |||||||||||||
Loan related expense | 1,051 | 576 | 3,141 | 2,367 | |||||||||||||
Other expense | 1,558 | 1,239 | 6,242 | 4,314 | |||||||||||||
Total Noninterest expense | 12,284 | 12,256 | 51,904 | 46,991 | |||||||||||||
Earnings before income taxes | 6,212 | 6,831 | 26,516 | 28,583 | |||||||||||||
Income taxes | 2,514 | 2,439 | 10,792 | 11,663 | |||||||||||||
Net earnings | $ | 3,698 | $ | 4,392 | $ | 15,724 | $ | 16,920 | |||||||||
OTHER SELECTED FINANCIAL DATA | |||||||||||||||||
Actual common shares outstanding at end of period | 10,147,910 | 10,586,659 | 10,147,910 | 10,586,659 | |||||||||||||
Average common shares outstanding | 10,141,606 | 9,800,612 | 10,411,258 | 9,234,894 | |||||||||||||
Average common shares & equivalents outstanding | 10,339,950 | 10,322,256 | 10,766,911 | 9,797,912 | |||||||||||||
Basic earnings per share | 0.37 | 0.45 | 1.51 | 1.83 | |||||||||||||
Diluted earnings per share | 0.36 | 0.43 | 1.46 | 1.73 | |||||||||||||
Return on average assets | 1.11 | % | 1.46 | % | 1.21 | % | 1.64 | % | |||||||||
Return on average equity | 13.75 | % | 20.11 | % | 14.72 | % | 23.89 | % | |||||||||
Investment Yield | 5.02 | % | 5.22 | % | 5.18 | % | 5.03 | % | |||||||||
Loan Yield | 9.04 | % | 9.92 | % | 9.54 | % | 10.12 | % | |||||||||
Cost of Interest-bearing Deposits | 4.61 | % | 4.68 | % | 4.72 | % | 4.20 | % | |||||||||
Cost of Borrowings | 7.08 | % | 7.84 | % | 7.56 | % | 7.41 | % | |||||||||
Net interest margin | 5.03 | % | 5.79 | % | 5.36 | % | 6.37 | % | |||||||||
Efficiency ratio | 59.56 | % | 61.35 | % | 63.28 | % | 59.31 | % | |||||||||
NET LOAN CHARGE-OFFS | |||||||||||||||||
Charge-offs | 510 | 25 | 1,336 | 381 | |||||||||||||
Recoveries | (102 | ) | (25 | ) | (236 | ) | (214 | ) | |||||||||
Net Charge-offs (Recoveries) | 408 | 0 | 1,100 | 167 |
TEMECULA VALLEY BANCORP, INC. | ||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(dollars in thousands except per share data) | ||||||||||||||||||||
Quarterly | ||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | ||||||||||||||||
EARNINGS | ||||||||||||||||||||
Net interest income (fully tax-equivalent) | $ | 15,813 | $ | 16,517 | $ | 17,054 | $ | 16,250 | $ | 16,282 | ||||||||||
Provision for loan and lease losses | $ | 2,130 | $ | 1,055 | $ | 0 | $ | 415 | $ | 890 | ||||||||||
Noninterest income | $ | 4,813 | $ | 1,521 | $ | 6,117 | $ | 3,938 | $ | 3,695 | ||||||||||
Noninterest expense | $ | 12,284 | $ | 12,642 | $ | 14,317 | $ | 12,664 | $ | 12,256 | ||||||||||
Net income | $ | 3,698 | $ | 2,595 | $ | 5,251 | $ | 4,179 | $ | 4,392 | ||||||||||
Basic earnings per share | $ | 0.37 | $ | 0.25 | $ | 0.49 | $ | 0.39 | $ | 0.45 | ||||||||||
Diluted earnings per share | $ | 0.36 | $ | 0.25 | $ | 0.47 | $ | 0.38 | $ | 0.43 | ||||||||||
Average shares outstanding | 10,141,606 | 10,247,356 | 10,661,179 | 10,601,748 | 9,800,612 | |||||||||||||||
Average diluted shares outstanding | 10,339,950 | 10,559,464 | 11,072,471 | 11,124,945 | 10,322,256 | |||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets | 1.11 | % | 0.79 | % | 1.59 | % | 1.34 | % | 1.46 | % | ||||||||||
Return on average common equity | 13.75 | % | 9.66 | % | 19.07 | % | 16.04 | % | 20.11 | % | ||||||||||
Net interest margin (fully tax-equivalent) | 5.03 | % | 5.38 | % | 5.51 | % | 5.54 | % | 5.79 | % | ||||||||||
Investment Yield | 5.02 | % | 5.16 | % | 5.24 | % | 5.23 | % | 5.22 | % | ||||||||||
Loan Yield | 9.04 | % | 9.62 | % | 9.79 | % | 9.75 | % | 9.92 | % | ||||||||||
Cost of Interest-bearing Deposits | 4.61 | % | 4.73 | % | 4.78 | % | 4.75 | % | 4.68 | % | ||||||||||
Cost of Borrowings | 7.08 | % | 7.51 | % | 7.66 | % | 8.14 | % | 7.84 | % | ||||||||||
Noninterest income/Operating revenue | 23.33 | % | 8.43 | % | 26.40 | % | 19.51 | % | 18.50 | % | ||||||||||
Efficiency ratio | 59.56 | % | 70.09 | % | 61.79 | % | 62.73 | % | 61.35 | % | ||||||||||
Full-time equivalent employees | 316 | 324 | 318 | 313 | 312 | |||||||||||||||
CAPITAL | ||||||||||||||||||||
Loans/Deposits | 106.60 | % | 104.60 | % | 100.15 | % | 102.43 | % | 105.66 | % | ||||||||||
Securities/Assets | 0.23 | % | 0.23 | % | 0.08 | % | 0.08 | % | 0.08 | % | ||||||||||
Equity to assets | 8.23 | % | 8.04 | % | 8.57 | % | 8.21 | % | 8.34 | % | ||||||||||
Regulatory leverage ratio | 10.68 | % | 10.60 | % | 10.93 | % | 11.27 | % | 11.42 | % | ||||||||||
Tier 1 risk-based capital ratio | 9.70 | % | 9.59 | % | 10.58 | % | 10.42 | % | 10.49 | % | ||||||||||
Total risk-based capital ratio | 10.77 | % | 10.57 | % | 11.51 | % | 11.65 | % | 11.90 | % | ||||||||||
Book value per share | $ | 10.70 | $ | 10.35 | $ | 10.52 | $ | 10.15 | $ | 9.75 | ||||||||||
Common dividends per share | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | N/A | $ | N/A | ||||||||||
ASSET QUALITY | ||||||||||||||||||||
Gross loan charge-offs | $ | 510 | $ | 149 | $ | 198 | $ | 479 | $ | 25 | ||||||||||
Net loan charge-offs (recoveries) | $ | 408 | $ | 24 | $ | 190 | $ | 479 | $ | (1 | ) | |||||||||
Net loan charge-offs to average loans | 0.09 | % | 0.06 | % | 0.06 | % | 0.16 | % | 0.00 | % | ||||||||||
Allowance for loan losses | $ | 15,022 | $ | 13,299 | $ | 12,268 | $ | 12,458 | $ | 12,522 | ||||||||||
Allowance for losses to total loans | 1.21 | % | 1.10 | % | 1.07 | % | 1.06 | % | 1.10 | % | ||||||||||
Nonperforming loans | $ | 30,936 | $ | 32,034 | $ | 26,629 | $ | 23,813 | $ | 19,124 | ||||||||||
90-Day Delinquencies | 0 | 0 | 0 | 0 | 140 | |||||||||||||||
Other real estate owned | $ | 0 | $ | 152 | $ | 722 | $ | 722 | $ | 1,255 | ||||||||||
Nonperforming assets (including OREO) | 30,936 | 32,186 | 27,352 | 24,535 | 20,519 | |||||||||||||||
Nonperforming assets to total assets | 2.35 | % | 2.47 | % | 2.09 | % | 1.87 | % | 1.66 | % | ||||||||||
Nonperforming Assets, Net of Guarantees (NOG) | 20,558 | 18,522 | 12,199 | 10,420 | 9,547 | |||||||||||||||
Nonperforming assets NOG to Total Assets | 1.56 | % | 1.42 | % | 0.93 | % | 0.79 | % | 0.77 | % | ||||||||||
END OF PERIOD BALANCES | ||||||||||||||||||||
Loans (before allowance) | $ | 1,237,717 | $ | 1,204,474 | $ | 1,151,515 | $ | 1,179,789 | $ | 1,142,693 | ||||||||||
Total earning assets (before allowance) | $ | 1,245,917 | $ | 1,231,510 | $ | 1,230,277 | $ | 1,236,224 | $ | 1,161,991 | ||||||||||
Total assets | $ | 1,319,110 | $ | 1,304,878 | $ | 1,308,965 | $ | 1,312,448 | $ | 1,238,189 | ||||||||||
Deposits | ||||||||||||||||||||
Noninterest-Bearing Demand | $ | 133,867 | $ | 144,938 | $ | 144,683 | $ | 151,293 | $ | 144,525 | ||||||||||
Money Market and NOW | $ | 146,270 | $ | 173,851 | $ | 151,893 | $ | 141,028 | $ | 130,357 | ||||||||||
Savings | $ | 28,059 | $ | 27,214 | $ | 29,487 | $ | 32,012 | $ | 29,781 | ||||||||||
Timed Deposits Under $100,000 | $ | 453,272 | $ | 391,365 | $ | 403,827 | $ | 420,301 | $ | 367,029 | ||||||||||
Timed Deposits $100,000 and Over | $ | 399,603 | $ | 414,184 | $ | 419,945 | $ | 407,219 | $ | 409,809 | ||||||||||
Deposits | $ | 1,161,071 | $ | 1,151,552 | $ | 1,149,835 | $ | 1,151,853 | $ | 1,081,501 | ||||||||||
Shareholders' equity | $ | 108,544 | $ | 104,944 | $ | 112,188 | $ | 107,744 | $ | 103,263 | ||||||||||
Period end common shares outstanding | 10,147,910 | 10,137,910 | 10,662,772 | 10,613,659 | 10,586,659 | |||||||||||||||
QUARTERLY AVERAGE BALANCES | ||||||||||||||||||||
Loans (before allowance) | $ | 1,234,795 | $ | 1,175,764 | $ | 1,208,928 | $ | 1,167,399 | $ | 1,099,465 | ||||||||||
Total earning assets (before allowance) | $ | 1,247,838 | $ | 1,218,899 | $ | 1,240,905 | $ | 1,189,218 | $ | 1,116,363 | ||||||||||
Total assets | $ | 1,321,118 | $ | 1,296,334 | $ | 1,323,088 | $ | 1,266,657 | $ | 1,197,032 | ||||||||||
Deposits | $ | 1,155,301 | $ | 1,140,412 | $ | 1,158,276 | $ | 1,106,127 | $ | 1,053,338 | ||||||||||
Shareholders' equity | $ | 106,725 | $ | 106,571 | $ | 110,424 | $ | 105,661 | $ | 86,650 | ||||||||||
LOAN PORTFOLIO (INCLUDING HELD-FOR-SALE) | |||||||||||||||||||
Residential Construction Loans | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 | ||||||||||||||
10 Owner Occupied Res Const | 0.58 | % | 0.53 | % | 0.41 | % | 0.72 | % | 0.96 | % | |||||||||
11 High-End Owner Occupied | 2.48 | % | 2.50 | % | 2.57 | % | 2.09 | % | 2.30 | % | |||||||||
20 Spec Residential Construction (1-4 units) | 3.66 | % | 3.69 | % | 3.89 | % | 3.56 | % | 3.60 | % | |||||||||
21 High-End Spec Residential Const (1-4 units) | 5.10 | % | 6.10 | % | 6.38 | % | 5.97 | % | 5.51 | % | |||||||||
23 High-End Residential Tract Construction (over 4 units) | 3.15 | % | 3.50 | % | 3.73 | % | 3.48 | % | 3.30 | % | |||||||||
24 Tract Construction (over 4 Units) | 2.18 | % | 1.97 | % | 1.83 | % | 1.84 | % | 2.24 | % | |||||||||
25 Multi-Family Construction | 1.45 | % | 1.25 | % | 1.43 | % | 1.15 | % | 0.67 | % | |||||||||
26 Condominium Construction | 3.79 | % | 3.03 | % | 2.37 | % | 2.15 | % | 2.39 | % | |||||||||
27 High-End Condominium Construction | 6.43 | % | 7.21 | % | 6.62 | % | 6.39 | % | 6.16 | % | |||||||||
28 Condominium Conversion | 0.96 | % | 0.96 | % | 1.49 | % | 1.76 | % | 1.92 | % | |||||||||
Sub-Total Residential Construction Loans | 29.80 | % | 30.75 | % | 30.72 | % | 29.10 | % | 29.03 | % | |||||||||
Commercial Construction Loans | |||||||||||||||||||
30 Owner-Occupied Comm Const | 3.58 | % | 4.05 | % | 4.40 | % | 4.32 | % | 3.32 | % | |||||||||
31 Restaurant/Bar Construction | 0.25 | % | 0.10 | % | 0.08 | % | 0.31 | % | 0.31 | % | |||||||||
32 Hotel/Motel Construction | 4.13 | % | 5.03 | % | 5.45 | % | 5.58 | % | 5.12 | % | |||||||||
33 Car Wash Construction | 0.46 | % | 0.45 | % | 0.55 | % | 0.69 | % | 0.94 | % | |||||||||
34 Gas Station/C Store Construction | 0.67 | % | 0.66 | % | 0.63 | % | 0.48 | % | 0.75 | % | |||||||||
36 Retail Spec Construction | 0.50 | % | 0.26 | % | 0.20 | % | 0.76 | % | 1.59 | % | |||||||||
38 Office Spec Construction | 1.15 | % | 1.73 | % | 1.78 | % | 2.24 | % | 1.64 | % | |||||||||
40 Industrial/Warehouse Spec Const | 1.35 | % | 1.13 | % | 1.04 | % | 1.51 | % | 1.95 | % | |||||||||
42 Healthcare Construction | 1.68 | % | 1.61 | % | 1.32 | % | 1.26 | % | 0.81 | % | |||||||||
44 Miscellaneous Comm Const | 0.38 | % | 0.33 | % | 0.27 | % | 0.15 | % | 0.41 | % | |||||||||
45 Mini-Storage Construction | 0.21 | % | 0.14 | % | 0.38 | % | 0.39 | % | 0.36 | % | |||||||||
50 Residential Land Development | 2.68 | % | 2.56 | % | 2.98 | % | 3.22 | % | 3.24 | % | |||||||||
51 Commercial Land Development | 0.75 | % | 0.76 | % | 0.85 | % | 0.43 | % | 0.44 | % | |||||||||
Sub-Total Commercial Construction Loans | 17.80 | % | 18.80 | % | 19.93 | % | 21.33 | % | 20.87 | % | |||||||||
Non-Construction Real Estate Loans | |||||||||||||||||||
55 Unimproved Land | 7.67 | % | 7.73 | % | 6.99 | % | 5.68 | % | 6.89 | % | |||||||||
59 Multi-Family | 0.32 | % | 0.39 | % | 0.43 | % | 0.65 | % | 0.59 | % | |||||||||
60 Owner-Occupied Commercial | 13.32 | % | 13.24 | % | 13.21 | % | 14.40 | % | 13.28 | % | |||||||||
61 Restaurant/Bar | 2.07 | % | 1.72 | % | 1.81 | % | 1.60 | % | 1.31 | % | |||||||||
62 Hotel/Motel | 7.82 | % | 6.47 | % | 5.84 | % | 5.28 | % | 5.75 | % | |||||||||
63 Car Wash | 1.06 | % | 1.11 | % | 1.11 | % | 1.25 | % | 1.09 | % | |||||||||
64 Gas Station/C Store | 4.16 | % | 4.39 | % | 4.56 | % | 4.34 | % | 3.82 | % | |||||||||
66 Retail Investment | 0.57 | % | 0.63 | % | 0.76 | % | 0.83 | % | 0.86 | % | |||||||||
68 Office Investment | 1.05 | % | 0.67 | % | 0.55 | % | 0.98 | % | 0.96 | % | |||||||||
70 Industrial/Warehouse Investment | 2.47 | % | 2.74 | % | 2.65 | % | 3.49 | % | 3.38 | % | |||||||||
72 Healthcare | 0.47 | % | 0.95 | % | 0.86 | % | 0.68 | % | 0.45 | % | |||||||||
74 Miscellaneous Commercial | 0.48 | % | 0.59 | % | 0.62 | % | 1.26 | % | 1.40 | % | |||||||||
75 Mini-Storage | 0.37 | % | 0.39 | % | 0.41 | % | 0.56 | % | 0.58 | % | |||||||||
80 1st TD 1-4 Residential | 1.47 | % | 1.34 | % | 1.45 | % | 1.62 | % | 1.59 | % | |||||||||
82 Junior TD 1-4 Residential | 2.04 | % | 2.17 | % | 2.04 | % | 1.80 | % | 1.95 | % | |||||||||
Sub-Total Non-Construction Real Estate Loans | 45.33 | % | 44.52 | % | 43.28 | % | 44.40 | % | 43.89 | % | |||||||||
Total Real Estate Secured Loans | 92.93 | % | 94.08 | % | 93.93 | % | 94.84 | % | 93.79 | % | |||||||||
Commercial, Consumer, Other | 7.07 | % | 5.92 | % | 6.07 | % | 5.16 | % | 6.21 | % | |||||||||
Total Loan Portfolio | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | |||||||||
CONTACT:
Temecula Valley Bancorp
Stephen H. Wacknitz, Chairman, CEO, and President
951-694-9940