Exhibit 99.1
Temecula Valley Bancorp Strengthened Reserves with $7.6 Million Provision in 3Q08
8th Largest SBA 7(a) Lender in the Nation
Maintains Solid Capital Ratios
TEMECULA, Calif.--(BUSINESS WIRE)--October 30, 2008--Temecula Valley Bancorp Inc. (NASDAQ: TMCV) today reported solid capital ratios, excellent growth in SBA lending, strong liquidity and lower operating expenses. Booking a $7.6 million provision for loan losses resulted in a net loss of $3.6 million, or $0.36 a share, for the third quarter of 2008, compared to a net loss of $2.0 million, or $0.20 per share, with a provision of $5.3 million in the prior linked quarter, and a net income of $2.6 million, or $0.25 per diluted share in the third quarter of 2007 when its provision was $1.1 million. For the first nine months of 2008, after booking a $15.1 million provision for loan losses, the net loss was $4.2 million, or $0.42 per share, compared to net income of $12.0 million, or $1.10 per diluted share, in the first nine months of 2007.
Due to the economic conditions, in early 2008 a strategic decision to shift more emphasis on SBA multi-purpose commercial owner-occupied real estate lending was made. “In less than one year, our SBA group has established itself as one of the most successful SBA lending teams in the country, and we are now the 8th largest SBA lender in the nation based on dollar volume in the 7(a) program,” said Stephen H. Wacknitz, Chairman, President and CEO. “By shifting our focus from construction and land development into SBA lending, with an emphasis on multi-purpose owner-occupied commercial real estate, we are able to better diversify our loan portfolio and build a strong source of fee income from loan servicing and originations.”
Third Quarter 2008 Highlights
- Temecula Valley Bancorp remains well-capitalized, according to regulatory requirements with a Tier 1 leverage ratio of 9.09% and a total capital to risk-adjusted assets of 11.46%.
- For 2008, loans grew 10% to $1.36 billion with SBA loans up 34% and now accounting for 28% of the total portfolio. In addition, SBA related construction loans account for $132.6 million of the total $575.1 million construction loan total at 09/30/08 compared to $120.5 million at 09/30/07 and $120.1 million at 12/31/07.
- The undisbursed portion of total construction loans has decreased dramatically since last year with $335.1 million at September 30, 2007; $321.2 million at December 31, 2007; and $240.5 million at September 30, 2008.
- Operating expenses declined 5% in the third quarter compared to last year and 7% year-to-date compared to last year reflecting a focus on efficiency and cost control.
- The $39.1 million investment securities available for sale are exclusively in SBA Pool Securities and a U.S. Government Agency bond with a short-term maturity. The $2.9 million held-to-maturity investment is a Fannie Mae mortgage-backed security. Temecula Valley does not own any Fannie Mae or Freddie Mac equity securities, nor does it own any sub-prime mortgage-backed bonds.
“Although our capital ratios are strong, we believe the new TARP Capital Purchase Program proposed by the Treasury Department has merit, and we are actively investigating the possibility of participating in this program. Whether funds will be available and what amount of funding will flow to community banks is not clear at this point,” Wacknitz commented. “At the same time, we have been substantially building our reserves and lowering operating expense in order to maintain adequate capital.” Temecula Valley recently announced that its Board of Directors voted to suspend regular quarterly cash dividends on its common stock in order to preserve capital of approximately $1.6 million per year. This action did not affect the recently declared cash dividend of $0.04 per share which was paid on October 15, 2008.
“We continue to remain optimistic about our ability to weather the current economic cycle and regain profitability. Although we cannot direct the wind, so to speak, we can adjust the sails. We are adjusting our goals and strategies to take advantage of opportunities in our regional as well as national market, particularly with the expansion of our SBA lending capabilities Unfortunately, it’s going to take a little longer than expected in this environment to bring down the balances of our construction and land development loans,” added Wacknitz.
“Although we are based in Southern California, about 25% of our loan portfolio is for SBA related financing outside of California. In addition, another 12% of our loan portfolio is in the San Francisco area, which is a relatively healthy real estate market,” said Wacknitz. “The good news is that more than 92% of our loan portfolio is secured by real estate that was underwritten at relatively low loan-to-value ratios. Even in the current difficult real estate environment, based on recent appraisals, the average loan-to-value ratio on our real estate secured loan portfolio is approximately 64%.
“As we continue to work through one of the worst residential real estate downturns ever, we still have confidence in the resiliency and desirability of our markets. We’ve experienced these cycles before–downturns followed by strong growth, leading sooner or later, at least in California, to a strong housing market,” Wacknitz added. “We are always trying to achieve the optimal mix of conservative underwriting and bottom-line profit generation. However, we know our markets, and we know how to manage them throughout various housing cycles. We have a strong capital base and one of the most experienced management teams in the state.”
Asset Quality
Before government guarantees of $11.4 million, nonperforming assets were $96.1 million or 6.35% of total assets at September 30, 2008. After deducting the SBA guarantees, nonperforming assets were $84.8 million or 5.60% of total loans at quarter end. Net charge-offs were an annualized 2.00% of average loans for the third quarter of 2008, compared with 0.01% a year ago. The provision for loan losses was $7.6 million for the third quarter of 2008 compared with $1.1 million reported for the third quarter of 2007. The allowance for loan loss increased to 1.48% of total loans from 1.10% for the year-ago quarter.
Net Non-Accrual Loans by Type | Sept. 30, 2008 | June 30, 2008 | ||||||||
(dollars in 000s) | Amount | % | Amount | % | ||||||
Construction – SFR | $ | 1,244 | 2% | $ | 1,161 | 2% | ||||
Construction – SFR – spec | 10,181 | 17% | 12,965 | 25% | ||||||
Construction – multi-family | 0 | 0% | 6,946 | 14% | ||||||
Construction – commercial | 0 | 0% | 0 | 0% | ||||||
Construction – land dev | 4,604 | 8% | 0 | 0% | ||||||
Construction – tract | 14,991 | 26% | 10,064 | 19% | ||||||
Construction – SBA | 6,728 | 11% | 4,710 | 9% | ||||||
Total Construction | $ | 37,748 | 64% | $ | 35,846 | 69% | ||||
Commercial real estate | $ | 10,597 | 18% | $ | 1,683 | 3% | ||||
SBA | 10,451 | 18% | 14,573 | 28% | ||||||
Commercial | 52 | 0% | 0 | 0% | ||||||
Consumer | 0 | 0% | 0 | 0% | ||||||
Total | $ | 58,848 | 100% | $ | 52,102 | 100% | ||||
| ||||||||||
Net Non-Accrual Loans by Market | Sept. 30, 2008 | June 30, 2008 | ||||||||
(dollars in 000s) | Amount | % | Amount | % | ||||||
San Diego County | $ | 8,886 | 15% | $ | 7,702 | 15% | ||||
Riverside County | 13,877 | 24% | 570 | 1% | ||||||
San Bernardino County | 6,475 | 11% | 13,541 | 26% | ||||||
Other California counties | 20,804 | 35% | 19,898 | 38% | ||||||
Outside California | 8,806 | 15% | 10,391 | 20% | ||||||
Total | $ | 58,848 | 100% | $ | 52,102 | 100% |
Loans 90+ days past due and still accruing consist of two loans totaling $3.1 million, a mini-perm real estate loan on a commercial property in Riverside County and a 14 unit condo construction project in San Diego County.
Net other real estate owned at September 30, 2008 for 21 loans totaled $22.8 million and consisted of four properties in San Bernardino County totaling $6.0 million, five properties in San Diego County totaling $10.3 million, one property in Riverside County totaling $53,000, six properties in other California counties totaling $4.3 million, and five properties outside of California totaling $2.2 million. By type of properties, there are nine SBA properties totaling $3.1 million and 12 construction related properties totaling $19.7 million.
Balance Sheet
Total assets increased 15% year-over-year to $1.51 billion at September 30, 2008, compared to $1.30 billion at September 30, 2007. Over the past year, total loans increased 10% to $1.36 billion at September 30, 2008 from $1.20 billion a year ago. Real estate construction and development loans fell 6% in the quarter and 2% for the year, now accounting for 42% of the portfolio. SBA loans grew 34% this year and now account for 28% of the portfolio and commercial loans increased 19%, now accounting for 6% of the portfolio. Year-over-year loan growth was funded by Fed Funds advances, a 5% growth in deposits, and a higher level of junior subordinated debt.
The loan portfolio is diversified both geographically and by loan type. Over 25% of the Bank’s loans are located outside of California, underwritten through various SBA programs. These loans are all commercial in nature, divided between owner-occupied commercial real estate ($279.7 million), commercial construction ($63.7 million), and other commercial real estate secured ($0.7 million).
Deposits at September 30, 2008, increased 5% to $1.20 billion compared to $1.15 billion a year ago. Core deposits (excluding CD’s of $100,000 or more) increased 20% to $883.6 million and account for 73% of total deposits. Time deposits under $100,000 increased 56% from $391.4 million to $610.0 million. “We believe the increase in FDIC insurance limits will provide opportunities for us to build core deposits,” said Wacknitz. Declining interest rates plus an improved mix of deposits contributed to the 129 basis point improvement in the cost of deposits during the past year, with the average cost of deposits at 3.44% for the current quarter compared to 4.73% for the third quarter of 2007.
Capital ratios remain strong at September 30, 2008, with the Tier 1 leverage ratio at 9.09%, the Tier 1 risk-based capital ratio at 8.81%, and the total risk-based capital ratio at 11.46%, all above the minimum to qualify as well capitalized by Temecula’s regulatory authorities. Shareholder equity fell slightly to $101.5 million at the end of the third quarter of 2008, compared to $104.9 million at September 30, 2007.
Income Statement
Total revenue, consisting of net interest income and noninterest income, was $13.8 million for the third quarter of 2008 compared with $18.0 million for the third quarter of 2007. Net interest income was $11.5 million, down 30% from $16.5 million in the third quarter a year ago. The decline in net interest income includes $366,000 in reversal of interest for nonaccrual loans in the third quarter. Year-to-date, revenue totaled $44.8 million compared to $61.4 million in the first nine months of 2007. Net interest margin was 3.32% in the third quarter, of which 11 basis points drop resulted from interest reversals. The net interest margin for the first nine months of 2008 was 3.70% with 22 basis points of the decline resulting from accrued interest being reversed.
Noninterest income increased to $2.2 million for the third quarter of 2008 from $1.5 million in the third quarter a year ago, reflecting a higher SBA net servicing income. For the third quarter of 2008, the SBA net servicing loss was $161,000, compared to a loss of $3.1 million in the third quarter of 2007. Year-to-date, SBA servicing income was positive at $362,000 compared to a loss of $4.8 million in the first nine months of 2007. Servicing income is very volatile based on repayment schedules and other market forces. Gains on the sale of loans were down to $935,000 in the quarter and $2.4 million year-to-date, due to the bank’s decision to portfolio more of its SBA 7(a) loans. This compares to $1.6 million in the third quarter and $8.4 million in the first nine months of 2007. “We made the strategic decision to retain more of our SBA loan production this year to improve the diversification of our loan portfolio and build interest income from these loans. In addition, and because of the turmoil currently in the credit markets, we believe the low premiums do not provide enough value to sell these loans at this time,” said David Bartram, President SBA Division.
Primarily due to lower bonus and salary expense, Temecula Valley’s salary and benefits expenses were 20% lower in the third quarter and down 15% year-to-date compared to the same periods in 2007. Noninterest expense for the third quarter was reduced 5% to $12.0 million compared to $12.6 million in the third quarter of 2007. Year-to-date noninterest expense fell 7% to $36.8 million from $39.6 million in the first nine months of 2007. The expense ratio, which is the annualized noninterest expense divided by average assets, improved to 3.23% in the third quarter, compared to 3.90% in the same quarter a year ago. The efficiency ratio increased to 87.04% for the third quarter of 2008 from 70.08% for the third quarter a year ago. In the first nine months of 2008, the efficiency ratio was 82.08% compared to 64.53% in the like period of 2007. For the third quarter, the increase in the efficiency ratio is due to a lower net interest margin offset by higher noninterest income and lower noninterest expense. For the year-to-date periods, the increase was due to lower net interest margin and noninterest income offset by lower noninterest expense.
About Temecula Valley Bank
Temecula Valley Bank (the “Bank”) has grown to be one of the nation’s leading producers of Small Business Administration (SBA) loans funding over $1.6 billion in the past five years. As a leading SBA Preferred Lender, the Bank has a network of SBA loan production offices in primarily the western and southeastern United States. The Bank was established in 1996 and operates full service offices in California through eleven full-service banking offices in Temecula, Murrieta, Corona, Carlsbad, El Cajon, Escondido, Fallbrook, Rancho Bernardo, San Marcos, Solana Beach and Ontario. Regional loan production centers originate real estate and construction loans throughout the state of California. Temecula Valley Bancorp Inc. was established in June 2002 and operates as a bank holding company for the Bank. For more information about the Company, visit Temecula’s website 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 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 INCOME | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
(dollars in thousands, except share and per share data) | |||||||||||||||||
3 Mos. Ended September 30, | 9 Mos. Ended September 30, | ||||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||||
INTEREST INCOME | |||||||||||||||||
Interest income and fees on loans | $ | 22,132 | $ | 28,496 | $ | 70,433 | $ | 86,061 | |||||||||
Other Interest income | 308 | 562 | 785 | 1,260 | |||||||||||||
Total Interest income | 22,440 | 29,058 | 71,218 | 87,321 | |||||||||||||
INTEREST EXPENSE | |||||||||||||||||
Interest on deposits | 9,572 | 11,892 | 30,598 | 35,240 | |||||||||||||
Interest on junior subordinated debt and other borrowings | 1,337 | 649 | 3,576 | 2,262 | |||||||||||||
Total Interest expense | 10,909 | 12,541 | 34,174 | 37,502 | |||||||||||||
Net interest income | 11,531 | 16,517 | 37,044 | 49,819 | |||||||||||||
Provision for loan losses | 7,550 | 1,055 | 15,050 | 1,470 | |||||||||||||
Net interest income after provision for loan losses | 3,981 | 15,462 | 21,994 | 48,349 | |||||||||||||
NON INTEREST INCOME | |||||||||||||||||
Service charges and fees | 166 | 154 | 465 | 454 | |||||||||||||
Gain on sale of loans, fixed assets and OREO | 935 | 1,632 | 2,370 | 8,369 | |||||||||||||
SBA Net Servicing income | (161 | ) | (3,108 | ) | 362 | (4,818 | ) | ||||||||||
Loan related income | 521 | 2,260 | 2,498 | 5,938 | |||||||||||||
Other income | 769 | 582 | 2,078 | 1,632 | |||||||||||||
Total Non Interest income | 2,230 | 1,520 | 7,773 | 11,575 | |||||||||||||
NON INTEREST EXPENSE | |||||||||||||||||
Salaries and employee benefits | 6,232 | 7,791 | 22,058 | 26,074 | |||||||||||||
Occupancy and equipment | 1,444 | 1,331 | 4,093 | 3,868 | |||||||||||||
Marketing and business promotion | 188 | 292 | 605 | 893 | |||||||||||||
Office expense | 654 | 648 | 1,828 | 2,011 | |||||||||||||
Loan related expense | 737 | 975 | 1,805 | 2,090 | |||||||||||||
Other expense | 2,722 | 1,604 | 6,396 | 4,685 | |||||||||||||
Total Non Interest expense | 11,977 | 12,641 | 36,785 | 39,621 | |||||||||||||
Earnings (Loss) before income taxes | (5,766 | ) | 4,341 | (7,018 | ) | 20,303 | |||||||||||
Income tax expense (benefit) | (2,158 | ) | 1,746 | (2,857 | ) | 8,278 | |||||||||||
Net earnings (loss) | $ | (3,608 | ) | $ | 2,595 | $ | (4,161 | ) | $ | 12,025 | |||||||
OTHER SELECTED FINANCIAL DATA | |||||||||||||||||
Actual common shares outstanding at end of period | 10,038,267 | 10,137,910 | 10,038,267 | 10,137,910 | |||||||||||||
Average common shares outstanding | 10,038,267 | 10,247,356 | 10,058,973 | 10,502,129 | |||||||||||||
Average common shares & equivalents outstanding | 10,038,267 | 10,559,464 | 10,058,973 | 10,892,611 | |||||||||||||
Basic earnings (loss) per share | (0.36 | ) | 0.25 | (0.42 | ) | 1.15 | |||||||||||
Diluted earnings (loss) per share | (0.36 | ) | 0.25 | (0.42 | ) | 1.10 | |||||||||||
Return on average assets (annualized) | (0.97 | )% | 0.79 | % | (0.39 | )% | 1.24 | % | |||||||||
Return on average equity (annualized) | (13.88 | )% | 9.66 | % | (5.33 | )% | 15.03 | % | |||||||||
Investment Yield | 2.77 | % | 5.16 | % | 3.10 | % | 5.20 | % | |||||||||
Loan Yield | 6.58 | % | 9.62 | % | 7.23 | % | 9.72 | % | |||||||||
Cost of Interest-bearing Deposits | 3.44 | % | 4.73 | % | 3.82 | % | 4.76 | % | |||||||||
Cost of Borrowings | 4.38 | % | 7.51 | % | 5.14 | % | 7.79 | % | |||||||||
Loan to deposit ratio, end of period | 112.76 | % | 104.60 | % | 112.76 | % | 104.60 | % | |||||||||
Net interest margin | 3.32 | % | 5.38 | % | 3.70 | % | 5.48 | % | |||||||||
Efficiency ratio | 87.04 | % | 70.08 | % | 82.08 | % | 64.54 | % | |||||||||
NET LOAN CHARGEOFFS | |||||||||||||||||
Chargeoffs | 6,797 | 149 | 11,283 | 826 | |||||||||||||
Recoveries | (89 | ) | (125 | ) | (280 | ) | (134 | ) | |||||||||
Net Chargeoffs (Recoveries) | 6,708 | 24 | 11,003 | 692 |
TEMECULA VALLEY BANCORP INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
(dollars in thousands, except share and per share data) | |||||||||||||||||||||
September 30, | September 30, | December 31, | |||||||||||||||||||
2008 | 2007 | % Change | 2007 | % Change | |||||||||||||||||
ASSETS | |||||||||||||||||||||
Cash and due from banks | $ | 12,578 | $ | 12,843 | (2 | %) | $ | 13,210 | (5 | %) | |||||||||||
Interest-bearing deposits in financial institutions | 1,000 | 1,000 | 0 | % | 1,000 | 0 | % | ||||||||||||||
Federal funds sold | 0 | 22,990 | (100 | %) | 4,220 | (100 | %) | ||||||||||||||
Investment securities available-for-sale | 39,125 | 0 | 0 | % | 0 | 0 | % | ||||||||||||||
Investment securities held-to-maturity | 2,875 | 3,046 | (6 | %) | 2,981 | (4 | %) | ||||||||||||||
Loans | |||||||||||||||||||||
Commercial | 81,977 | 53,885 | 52 | % | 68,661 | 19 | % | ||||||||||||||
Real Estate-Construction | 575,147 | 594,912 | (3 | %) | 586,906 | (2 | %) | ||||||||||||||
Real Estate-Other | 313,743 | 286,217 | 10 | % | 292,153 | 7 | % | ||||||||||||||
SBA | 384,473 | 266,248 | 44 | % | 286,367 | 34 | % | ||||||||||||||
Consumer and other | 4,718 | 3,212 | 47 | % | 3,630 | 30 | % | ||||||||||||||
Total Gross Loans | 1,360,058 | 1,204,474 | 13 | % | 1,237,717 | 10 | % | ||||||||||||||
Less allowance for loan losses | (20,069 | ) | (13,299 | ) | 51 | % | (16,022 | ) | 25 | % | |||||||||||
Total Loans, net | 1,339,989 | 1,191,175 | 12 | % | 1,221,695 | 10 | % | ||||||||||||||
Federal Reserve & Home Loan Bank stock, at cost | 4,842 | 2,867 | 69 | % | 2,905 | 67 | % | ||||||||||||||
Bank premises and equipment, net | 5,311 | 5,233 | 1 | % | 5,271 | 1 | % | ||||||||||||||
Other real estate owned, net | 26,870 | 152 | 17578 | % | 0 | 0 | % | ||||||||||||||
Cash surrender value life insurance | 30,715 | 27,773 | 11 | % | 28,034 | 10 | % | ||||||||||||||
SBA-loan servicing asset | 4,927 | 5,572 | (12 | %) | 5,350 | (8 | %) | ||||||||||||||
SBA-loan I/O strip receivable | 7,008 | 6,846 | 2 | % | 6,599 | 6 | % | ||||||||||||||
Accrued interest | 5,901 | 7,014 | (16 | %) | 6,827 | (14 | %) | ||||||||||||||
Other Assets | 32,831 | 18,367 | 79 | % | 20,433 | 61 | % | ||||||||||||||
Total Assets | $ | 1,513,972 | $ | 1,304,878 | 16 | % | $ | 1,318,525 | 15 | % | |||||||||||
LIABILITIES AND STOCKHOLDER EQUITY | |||||||||||||||||||||
Deposits | |||||||||||||||||||||
Non-interest Bearing Deposits | 139,577 | 144,938 | (4 | %) | 133,867 | 4 | % | ||||||||||||||
Money Market & NOW | 106,860 | 173,851 | (39 | %) | 146,270 | (27 | %) | ||||||||||||||
Savings | 27,157 | 27,214 | (0 | %) | 28,059 | (3 | %) | ||||||||||||||
Time Deposits | 932,568 | 805,549 | 16 | % | 852,875 | 9 | % | ||||||||||||||
Total deposits | 1,206,162 | 1,151,552 | 5 | % | 1,161,071 | 4 | % | ||||||||||||||
Junior subordinated debt securities | 56,924 | 34,023 | 67 | % | 34,023 | 67 | % | ||||||||||||||
Federal Reserve Bank, Discount Window Advance | 131,800 | 0 | 0 | % | 0 | 0 | % | ||||||||||||||
Accrued interest | 2,787 | 2,245 | 24 | % | 2,329 | 20 | % | ||||||||||||||
Other liabilities | 14,844 | 12,114 | 23 | % | 13,143 | 13 | % | ||||||||||||||
Total liabilities | 1,412,517 | 1,199,934 | 18 | % | 1,210,566 | 17 | % | ||||||||||||||
Stockholder's equity | 101,455 | 104,944 | (3 | %) | 107,959 | (6 | %) | ||||||||||||||
Total liabilities and Stockholder's equity | $ | 1,513,972 | $ | 1,304,878 | 16 | % | $ | 1,318,525 | 15 | % |
TEMECULA VALLEY BANCORP INC. | |||||||||
(UNAUDITED) | |||||||||
(dollars in thousands, except share and per share data) | |||||||||
September 30, | September 30, | December 31, | |||||||
2008 | 2007 | 2007 | |||||||
SELECTED BALANCE SHEET DATA | |||||||||
Book value per share, end of period | 10.11 | 10.35 | 10.64 | ||||||
Tier 1 leverage capital ratio | 9.09% | 10.60% | 10.63% | ||||||
Tier 1 risk-based capital ratio | 8.81% | 9.59% | 9.65% | ||||||
Total risk-based capital ratio | 11.46% | 10.57% | 10.80% | ||||||
Allowance for loan losses as a % of total loans | 1.48% | 1.10% | 1.29% | ||||||
Gross nonperforming assets as a % of total assets | 6.35% | 2.47% | 2.35% | ||||||
Net nonperforming assets as a % of total assets | 5.60% | 1.39% | 1.56% | ||||||
Net chargeoffs (annualized) as a % of ytd average loans | 1.13% | 0.06% | 0.09% | ||||||
PAST DUE AND NON-ACCRUAL LOANS | |||||||||
September 30, 2008 | Gross Balance | Government Guaranty | Net Balance | ||||||
30 - 89 days past due | 26,625 | (425) | 26,200 | ||||||
90+ days past due and accruing | 3,076 | 0 | 3,076 | ||||||
Non-accrual | 66,176 | (7,328) | 58,848 | ||||||
Other real estate owned (REO) | 26,870 | (4,030) | 22,840 | ||||||
Total non-performing assets | 96,122 | (11,358) | 84,764 | ||||||
June 30, 2008 | |||||||||
30 - 89 days past due | 32,063 | (1,426) | 30,637 | ||||||
90+ days past due and accruing | 0 | 0 | 0 | ||||||
Non-accrual | 60,669 | (8,567) | 52,102 | ||||||
Other real estate owned (REO) | 13,724 | (1,888) | 11,836 | ||||||
Total non-performing assets | 74,393 | (10,455) | 63,938 | ||||||
March 31, 2008 | |||||||||
30 - 89 days past due | 19,844 | (2,160) | 17,684 | ||||||
90+ days past due and accruing | 0 | 0 | 0 | ||||||
Non-accrual | 68,350 | (10,436) | 57,914 | ||||||
Other real estate owned (REO) | 3,091 | (816) | 2,275 | ||||||
Total non-performing assets | 71,441 | (11,252) | 60,189 | ||||||
December 31, 2007 | |||||||||
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 non-performing assets | 30,936 | (10,379) | 20,557 | ||||||
September 30, 2007 | |||||||||
30 - 89 days past due | 6,009 | (448) | 5,561 | ||||||
90+ days past due and accruing | 0 | 0 | 0 | ||||||
Non-accrual | 32,034 | (13,550) | 18,484 | ||||||
Other real estate owned (REO) | 152 | (114) | 38 | ||||||
Total non-performing assets | 32,186 | (13,664) | 18,522 |
TEMECULA VALLEY BANCORP, INC. | |||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
(dollars in thousands, except share and per share data) | |||||||||||||||||||||
Quarterly | |||||||||||||||||||||
2008 |
| 2007 | |||||||||||||||||||
3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||||||
EARNINGS | |||||||||||||||||||||
Net interest income (fully tax-equivalent) | $ | 11,531 | $ | 12,017 | $ | 13,496 | $ | 15,813 | $ | 16,517 | $ | 17,054 | $ | 16,250 | |||||||
Provision for loan and lease losses | $ | 7,550 | $ | 5,300 | $ | 2,200 | $ | 3,130 | $ | 1,055 | $ | 0 | $ | 415 | |||||||
Non Interest income | $ | 2,230 | $ | 2,792 | $ | 2,751 | $ | 4,813 | $ | 1,521 | $ | 6,117 | $ | 3,938 | |||||||
Non Interest expense | $ | 11,977 | $ | 13,163 | $ | 11,645 | $ | 12,284 | $ | 12,642 | $ | 14,317 | $ | 12,664 | |||||||
Net income (loss) | $ | (3,608) | $ | (2,011) | $ | 1,458 | $ | 3,113 | $ | 2,595 | $ | 5,251 | $ | 4,179 | |||||||
Basic earnings (loss) per share | $ | (0.36) | $ | (0.20) | $ | 0.14 | $ | 0.31 | $ | 0.25 | $ | 0.49 | $ | 0.39 | |||||||
Diluted earnings (loss) per share | $ | (0.36) | $ | (0.20) | $ | 0.14 | $ | 0.30 | $ | 0.25 | $ | 0.47 | $ | 0.38 | |||||||
Average shares outstanding | 10,038,267 | 10,038,322 | 10,100,558 | 10,141,606 | 10,247,356 | 10,661,179 | 10,601,748 | ||||||||||||||
Average diluted shares outstanding | 10,038,267 | 10,038,322 | 10,217,048 | 10,339,950 | 10,559,464 | 11,072,471 | 11,124,945 | ||||||||||||||
PERFORMANCE RATIOS | |||||||||||||||||||||
Return on average assets | (0.97)% | (0.58)% | 0.43% | 0.93% | 0.79% | 1.59% | 1.34% | ||||||||||||||
Return on average common equity | (13.88)% | (7.59)% | 5.44% | 11.60% | 9.66% | 19.07% | 16.04% | ||||||||||||||
Net interest margin (fully tax-equivalent) | 3.32% | 3.66% | 4.16% | 5.03% | 5.38% | 5.51% | 5.54% | ||||||||||||||
Investment Yield | 2.77% | 3.67% | 3.37% | 5.02% | 5.16% | 5.24% | 5.23% | ||||||||||||||
Loan Yield | 6.58% | 7.02% | 8.12% | 9.04% | 9.62% | 9.79% | 9.75% | ||||||||||||||
Cost of Interest-bearing Deposits | 3.44% | 3.74% | 4.31% | 4.61% | 4.73% | 4.78% | 4.75% | ||||||||||||||
Cost of Borrowings | 4.38% | 4.80% | 7.87% | 7.08% | 7.51% | 7.66% | 8.14% | ||||||||||||||
Noninterest income/Operating revenue | 16.21% | 18.85% | 16.93% | 23.33% | 8.43% | 26.40% | 19.51% | ||||||||||||||
Efficiency ratio | 87.04% | 88.89% | 71.67% | 59.56% | 70.09% | 61.79% | 62.73% | ||||||||||||||
Full-time equivalent employees | 297 | 299 | 317 | 316 | 324 | 318 | 313 | ||||||||||||||
CAPITAL | |||||||||||||||||||||
Loans/ Deposits | 112.76% | 107.95% | 106.08% | 106.60% | 104.60% | 100.15% | 102.43% | ||||||||||||||
Securities/ Assets | 2.77% | 2.91% | 0.21% | 0.23% | 0.23% | 0.08% | 0.08% | ||||||||||||||
Equity to assets | 6.70% | 7.19% | 7.83% | 8.19% | 8.04% | 8.57% | 8.21% | ||||||||||||||
Regulatory leverage ratio | 9.09% | 9.96% | 10.41% | 10.63% | 10.60% | 10.93% | 11.27% | ||||||||||||||
Tier 1 risk-based capital ratio | 8.81% | 9.22% | 9.82% | 9.65% | 9.59% | 10.58% | 10.42% | ||||||||||||||
Total risk-based capital ratio | 11.46% | 11.80% | 12.35% | 10.80% | 10.57% | 11.51% | 11.65% | ||||||||||||||
Book value per share | $ | 10.11 | $ | 10.49 | $ | 10.71 | $ | 10.64 | $ | 10.35 | $ | 10.52 | $ | 10.15 | |||||||
Common dividends per share | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | N/A | |||||||
ASSET QUALITY | |||||||||||||||||||||
Gross loan charge-offs | $ | 6,797 | $ | 3,067 | $ | 1,419 | $ | 510 | $ | 149 | $ | 198 | $ | 479 | |||||||
Net loan charge-offs (recoveries) | $ | 6,708 | $ | 3,043 | $ | 1,253 | $ | 408 | $ | 24 | $ | 190 | $ | 479 | |||||||
Net loan charge-offs annualized to quarterly average loans | 2.00% | 0.95% | 0.40% | 0.13% | 0.01% | 0.06% | 0.17% | ||||||||||||||
Allowance for loan losses | $ | 20,069 | $ | 19,226 | $ | 16,969 | $ | 16,022 | $ | 13,299 | $ | 12,268 | $ | 12,458 | |||||||
Allowance for losses to total loans | 1.48% | 1.45% | 1.34% | 1.29% | 1.10% | 1.07% | 1.06% | ||||||||||||||
Allowance for losses to total loans (less held for sale) | 1.76% | 1.74% | 1.62% | 1.56% | 1.33% | 1.28% | 1.27% | ||||||||||||||
Nonaccrual loans - gross | $ | 66,176 | $ | 60,669 | $ | 68,350 | $ | 30,936 | $ | 32,034 | $ | 26,629 | $ | 23,813 | |||||||
90-Day Delinquencies still accruing - gross | 3,076 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Other real estate owned - gross | $ | 26,870 | $ | 13,724 | $ | 3,091 | $ | 0 | $ | 152 | $ | 722 | $ | 722 | |||||||
Nonperforming assets (including OREO) | 96,122 | 74,393 | 71,441 | 30,936 | 32,186 | 27,352 | 24,535 | ||||||||||||||
Nonperforming assets to total assets | 6.35% | 5.08% | 5.19% | 2.35% | 2.47% | 2.09% | 1.87% | ||||||||||||||
Nonperforming Assets, Net of Guarantees (NOG) | 84,764 | 63,938 | 60,189 | 20,558 | 18,522 | 12,199 | 10,420 | ||||||||||||||
Nonperforming assets NOG to Total Assets | 5.60% | 4.37% | 4.37% | 1.56% | 1.42% | 0.93% | 0.79% | ||||||||||||||
END OF PERIOD BALANCES | |||||||||||||||||||||
Loans (before allowance) | $ | 1,360,058 | $ | 1,326,574 | $ | 1,270,210 | $ | 1,237,717 | $ | 1,204,474 | $ | 1,151,515 | $ | 1,179,789 | |||||||
Total earning assets (before allowance) | $ | 1,403,058 | $ | 1,370,223 | $ | 1,301,454 | $ | 1,245,917 | $ | 1,231,510 | $ | 1,230,277 | $ | 1,236,224 | |||||||
Total assets | $ | 1,513,972 | $ | 1,464,725 | $ | 1,376,209 | $ | 1,318,525 | $ | 1,304,878 | $ | 1,308,965 | $ | 1,312,448 | |||||||
Deposits | |||||||||||||||||||||
Non Interest-Bearing Demand | $ | 139,577 | $ | 145,193 | $ | 144,213 | $ | 133,867 | $ | 144,938 | $ | 144,683 | $ | 151,293 | |||||||
Money Market and NOW | $ | 106,860 | $ | 134,945 | $ | 155,811 | $ | 146,270 | $ | 173,851 | $ | 151,893 | $ | 141,028 | |||||||
Savings | $ | 27,157 | $ | 26,903 | $ | 28,386 | $ | 28,059 | $ | 27,214 | $ | 29,487 | $ | 32,012 | |||||||
Timed Deposits Under $100,000 | $ | 610,044 | $ | 537,087 | $ | 470,817 | $ | 453,272 | $ | 391,365 | $ | 403,827 | $ | 420,301 | |||||||
Timed Deposits $100,000 and Over | $ | 322,524 | $ | 384,795 | $ | 398,165 | $ | 399,603 | $ | 414,184 | $ | 419,945 | $ | 407,219 | |||||||
Deposits | $ | 1,206,162 | $ | 1,228,923 | $ | 1,197,392 | $ | 1,161,071 | $ | 1,151,552 | $ | 1,149,835 | $ | 1,151,853 | |||||||
Shareholders' equity | $ | 101,455 | $ | 105,296 | $ | 107,796 | $ | 107,959 | $ | 104,944 | $ | 112,188 | $ | 107,744 | |||||||
Period end common shares outstanding | 10,038,267 | 10,033,267 | 10,063,267 | 10,147,910 | 10,137,910 | 10,662,772 | 10,613,659 | ||||||||||||||
QUARTERLY AVERAGE BALANCES | |||||||||||||||||||||
Loans (before allowance) | $ | 1,334,421 | $ | 1,294,078 | $ | 1,266,788 | $ | 1,234,795 | $ | 1,175,764 | $ | 1,208,928 | $ | 1,167,399 | |||||||
Total earning assets (before allowance) | $ | 1,378,505 | $ | 1,317,206 | $ | 1,300,521 | $ | 1,247,838 | $ | 1,218,899 | $ | 1,240,905 | $ | 1,189,218 | |||||||
Total assets | $ | 1,481,855 | $ | 1,404,359 | $ | 1,374,297 | $ | 1,321,112 | $ | 1,296,334 | $ | 1,323,088 | $ | 1,266,657 | |||||||
Deposits | $ | 1,240,259 | $ | 1,177,204 | $ | 1,195,820 | $ | 1,155,301 | $ | 1,140,412 | $ | 1,158,276 | $ | 1,106,127 | |||||||
Shareholders' equity | $ | 103,417 | $ | 106,544 | $ | 107,809 | $ | 106,432 | $ | 106,571 | $ | 110,424 | $ | 105,661 |
TEMECULA VALLEY BANCORP, INC. | ||||||||||||||
(UNAUDITED) | ||||||||||||||
(dollars in thousands, except share and per share data) | ||||||||||||||
LOAN PORTFOLIO (INCLUDING HELD-FOR-SALE) | ||||||||||||||
Residential Construction Loans | 9/30/2008 | 6/30/2008 | 3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | |||||||
10 Owner Occupied Res Const | 0.76% | 0.77% | 0.74% | 0.58% | 0.53% | 0.41% | 0.72% | |||||||
11 High-End Owner Occupied | 1.74% | 2.10% | 2.81% | 2.48% | 2.50% | 2.57% | 2.09% | |||||||
20 Spec Residential Construction (1-4 units) | 2.37% | 2.90% | 3.18% | 3.66% | 3.69% | 3.89% | 3.56% | |||||||
21 High-End Spec Residential Const (1-4 units) | 3.55% | 3.84% | 3.84% | 5.10% | 6.10% | 6.38% | 5.97% | |||||||
23 High-End Residential Tract Construction (over 4 units) | 2.10% | 2.57% | 3.67% | 3.15% | 3.50% | 3.73% | 3.48% | |||||||
24 Tract Construction (over 4 Units) | 2.85% | 2.93% | 3.32% | 2.18% | 1.97% | 1.83% | 1.84% | |||||||
25 Multi-Family Construction | 0.82% | 0.78% | 1.51% | 1.45% | 1.25% | 1.43% | 1.15% | |||||||
26 Condominium Construction | 4.53% | 5.09% | 4.56% | 3.79% | 3.03% | 2.37% | 2.15% | |||||||
27 High-End Condominium Construction | 6.03% | 6.58% | 7.06% | 6.43% | 7.21% | 6.62% | 6.39% | |||||||
28 Condominium Conversion | 1.00% | 0.94% | 0.96% | 0.96% | 0.96% | 1.49% | 1.76% | |||||||
Sub-Total Residential Construction Loans | 25.75% | 28.48% | 31.66% | 29.80% | 30.75% | 30.72% | 29.10% | |||||||
Commercial Construction Loans | ||||||||||||||
30 Owner-Occupied Comm Const | 1.99% | 2.34% | 3.05% | 3.58% | 4.05% | 4.40% | 4.32% | |||||||
31 Restaurant/Bar Construction | 0.60% | 0.56% | 0.50% | 0.25% | 0.10% | 0.08% | 0.31% | |||||||
32 Hotel/Motel Construction | 5.53% | 6.02% | 4.87% | 4.13% | 5.03% | 5.45% | 5.58% | |||||||
33 Car Wash Construction | 0.46% | 0.42% | 0.53% | 0.46% | 0.45% | 0.55% | 0.69% | |||||||
34 Gas Station/C Store Construction | 0.26% | 0.61% | 0.74% | 0.67% | 0.66% | 0.63% | 0.48% | |||||||
36 Retail Spec Construction | 0.74% | 0.67% | 0.61% | 0.50% | 0.26% | 0.20% | 0.76% | |||||||
38 Office Spec Construction | 1.36% | 1.13% | 1.02% | 1.15% | 1.73% | 1.78% | 2.24% | |||||||
40 Industrial/Warehouse Spec Const | 0.47% | 1.29% | 1.44% | 1.35% | 1.13% | 1.04% | 1.51% | |||||||
42 Healthcare Construction | 1.12% | 1.11% | 1.46% | 1.68% | 1.61% | 1.32% | 1.26% | |||||||
44 Miscellaneous Comm Const | 0.30% | 0.30% | 0.30% | 0.38% | 0.33% | 0.27% | 0.15% | |||||||
45 Mini-Storage Construction | 0.18% | 0.24% | 0.24% | 0.21% | 0.14% | 0.38% | 0.39% | |||||||
50 Residential Land Development | 2.31% | 2.32% | 2.33% | 2.68% | 2.56% | 2.98% | 3.22% | |||||||
51 Commercial Land Development | 0.78% | 0.76% | 0.75% | 0.75% | 0.76% | 0.85% | 0.43% | |||||||
Sub-Total Commercial Construction Loans | 16.09% | 17.76% | 17.84% | 17.80% | 18.80% | 19.93% | 21.33% | |||||||
Non-Construction Real Estate Loans | ||||||||||||||
55 Unimproved Land | 5.87% | 6.93% | 6.78% | 7.67% | 7.73% | 6.99% | 5.68% | |||||||
59 Multi-Family | 0.75% | 0.78% | 0.29% | 0.32% | 0.39% | 0.43% | 0.65% | |||||||
60 Owner-Occupied Commercial | 16.36% | 15.37% | 13.05% | 13.32% | 13.24% | 13.21% | 14.40% | |||||||
61 Restaurant/Bar | 1.57% | 1.44% | 1.73% | 2.07% | 1.72% | 1.81% | 1.60% | |||||||
62 Hotel/Motel | 11.30% | 8.04% | 7.81% | 7.82% | 6.47% | 5.84% | 5.28% | |||||||
63 Car Wash | 1.08% | 1.07% | 0.99% | 1.06% | 1.11% | 1.11% | 1.25% | |||||||
64 Gas Station/C Store | 3.64% | 3.55% | 3.86% | 4.16% | 4.39% | 4.56% | 4.34% | |||||||
66 Retail Investment | 0.88% | 0.81% | 0.65% | 0.57% | 0.63% | 0.76% | 0.83% | |||||||
68 Office Investment | 1.53% | 1.61% | 1.02% | 1.05% | 0.67% | 0.55% | 0.98% | |||||||
70 Industrial/Warehouse Investment | 2.77% | 2.17% | 2.40% | 2.47% | 2.74% | 2.65% | 3.49% | |||||||
72 Healthcare | 0.92% | 1.06% | 0.70% | 0.47% | 0.95% | 0.86% | 0.68% | |||||||
74 Miscellaneous Commercial | 0.82% | 0.21% | 0.34% | 0.48% | 0.59% | 0.62% | 1.26% | |||||||
75 Mini-Storage | 0.33% | 0.34% | 0.36% | 0.37% | 0.39% | 0.41% | 0.56% | |||||||
80 1st TD 1-4 Residential | 1.12% | 1.00% | 1.40% | 1.47% | 1.34% | 1.45% | 1.62% | |||||||
82 Junior TD 1-4 Residential | 1.67% | 1.78% | 1.98% | 2.04% | 2.17% | 2.04% | 1.80% | |||||||
Sub-Total Non-Construction Real Estate Loans | 50.62% | 46.17% | 43.37% | 45.33% | 44.52% | 43.28% | 44.40% | |||||||
Total Real Estate Secured Loans | 92.46% | 92.42% | 92.88% | 92.93% | 94.08% | 93.93% | 94.84% | |||||||
Commercial, Consumer, Other | 7.54% | 7.58% | 7.12% | 7.07% | 5.92% | 6.07% | 5.16% | |||||||
Total Loan Portfolio | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
CONTACT:
Temecula Valley Bancorp Inc.
Chairman, President & CEO
Stephen H. Wacknitz, 951-694-9940