UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12B-25
NOTIFICATION OF LATE FILING
Commission File Number: 0-22616
(Check One): [X] Form 10-K [ ] Form 11-K [ ] Form 20-F [ ] Form 10-Q
[ ] Form N-SAR
For Period Ended: December 31, 2002
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
The registrant is filing its Annual Report on Form 10-K for the year ended
December 31, 2002 (the "Annual Report") on the date hereof. The Annual Report
does not include in Item 15 the financial statements and related notes and
financial statement schedules of NTL Europe, Inc. and NTL (Delaware), Inc. as of
December 31, 2002 and 2001, and for the three years ended December 31, 2002
required by Rule 3-10 of Regulation S-X. In addition, the Annual Report does not
contain the certification required by Rule 13a-14 of the Securities Exchange Act
of 1934, as amended, and is not accompanied by the certification required by
section 906 of the Sarbanes-Oxley Act of 2002.
PART I-- REGISTRANT INFORMATION
Full Name of Registrant: Temecula Valley Bancorp Inc.
Former Name if Applicable: N/A
Address of Principal Executive Office
(Street and Number): 27710 Jefferson Ave., Suite A-100
City, State and Zip Code: Temecula, CA 92590
PART II - RULES 12B-25(B) AND (C)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate)
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
[X] (b) The subject annual report, semi-annual report, transition report on
Form 10-K, or portion thereof will be filed on or before the fifteenth
calendar day following the prescribed due date; and
[X] (c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why the Form 10-K, or
portion thereof could not be filed within the prescribed time period.
Due to the extensive volume of necessary exhibits that need to be
included in the 10K filing, we could not file within the
prescribed time period.
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Donald A. Pitcher ( 909) 506-1050
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If answer is no,
identify report(s). [X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion
thereof? [X] Yes [ ] No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
Explanation:
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Since Temecula Valley Bank, N.A. (the "Bank") (Temecula Valley Bancorp
Inc.'s wholly-owned subsidiary) opened in December 1996, it has consistently,
from year to year, had substantial growth. The Bank, collectively with Temecula
Valley Bancorp Inc. (the "Company"), has 199 employees (194 full time
equivalent), of which 181 are full time.
Total assets increased from $190,024,416 at December 31, 2001 to
$310,289,097 at December 31, 2002, a 63% increase.
Total loans, excluding deferred loan fees, increased from $150,963,562 at
December 31, 2001 to $272,765,590 at December 31, 2002, an 81% increase.
The Bank had $198,861 of non-performing loans as of December 31, 2001, of
which $92,895 was guaranteed by the SBA, compared to $1,908,169 of
non-performing loans as of December 31, 2002, of which $1,077,597 was government
guaranteed.
Investments, which exclude Federal Reserve Bank and Federal Home Loan Bank
stock, decreased from $16,400,000 at December 31, 2001 to $0 at December 31,
2002. The change from year to year is largely attributable to loans and
servicing assets increasing more than deposits and borrowings. At year-end 2001,
all of the investments were in overnight Federal Funds Sold.
Deposits increased from $172,928,225 at December 31, 2001 to $269,321,220
at December 31, 2002.
On June 26, 2002 the Company borrowed $7,000,000 by means of a pooled Trust
Preferred Note. The note carries a floating rate of the three-month LIBOR plus
3.45%, or currently 4.85%. The up front cost of the borrowing was $211,000 and
is being amortized to interest expense over five years, which is the end of
prepayment penalty period. The note has a thirty-year maturity. The net amount
of $6,789,000 was transferred to the Bank as capital. At the Company, the Trust
Preferred borrowing can be treated as tier one capital up to 25% of tier one
capital, with the remainder treated as tier two capital.
A liquidity ratio is the sum of cash and due from banks, net of reserve
requirements, federal funds sold, interest-bearing deposits with other financial
institutions and investments securities, less amounts pledged to secure deposits
and for other purposes, divided by the sum of total deposits, less deposits
secured by marketable securities and short-term borrowings. Using this
definition, the Bank's liquidity ratio was 13.8% at December 31, 2001 and 4.2%
at December 31, 2002.
The following table provides a comparison of our leverage and risk-weighted
capital ratios for the Company as of the dates indicated and the regulatory
standards:
To Be Well
Capitalized Under Actual Ratio
Minimum Required for Capital Prompt Corrective December 31
Adequacy Purposes Action Provisions -----------
----------------- ----------------- 2002 2001 2000
---- ---- ----
Leverage 4.0% (1) 5.0% 8.0% 7.9% 7.5%
Tier 1 risk-based capital 4.0% 6.0% 8.7% 9.4% 8.9%
Risk-based capital ratio 8.0% 10.0% 10.6% 10.2% 9.9%
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(1)The Comptroller may require the Bank to maintain a leverage ratio of up to
100 basis points above the standard minimum.
For 2002, net income was $4,191,054, or $1.14 per basic share and $1.00 per
diluted share. For 2001, net income was $1,803,581, or $.56 per basic share and
$.51 per diluted share. The Bank has been profitable every full quarter since it
opened, except for the first quarter of 1997. The Company sold $5,933,122 of the
unguaranteed portion of SBA 7A loans in 2001, which added $553,457 to the net
income. The Company sold $12,573,048 of the unguaranteed portion of SBA 7A loans
in 2002, which added $1,232,355 to the net income. The return on average assets
was 1.15% in 2001, compared to 1.69% for 2002. The return on average equity was
14.82% for 2001 compared to 24.34% for 2002.
Net interest income was $9,287,803 in 2001, compared to $13,431,236 in
2002. This relates to a net interest margin of 6.74% in 2001, compared to 6.25%
in 2002. The net interest margin decreased in 2001 and 2002 due to the Federal
Reserve Bank rate reductions of 4.75% in 2001 and 0.50% in late 2002, even
though the loan to deposit ratio increased from 86.90% at December 31, 2001 to
100.78% at December 31, 2002. Loans produced a yield of 9.54% in 2001 and 7.99%
in 2002. Investments, which includes Federal Funds sold, FRB stock and FHLB
stock, yielded 3.75% in 2001 and 1.87% in 2002. Total interest earning assets
yielded 8.73% in 2001 and 7.71% in 2002. The cost of interest bearing deposits
was 2.93% in 2001 and 1.89% in 2002. For 2002, the cost of other borrowing was
3.21% and consisted of Federal Funds Purchased, FHLB advances, and Trust
Preferred Borrowing. There were no other borrowings in 2001.
The provision for loan losses for the year ended December 31, 2001 was
$400,000 and $2,460,000 for the year ended December 31, 2002.
Non-interest income of $8,952,310 in 2001 and $17,895,166 in 2002
contributed significantly to earnings. Service charges increased from $786,142
in 2001 to $965,067 in 2002 due to increased number of accounts. Mortgage fees,
which is comprised of broker referral income and other fees on mortgage loan
originations, increased from $2,004,254 in 2001 to $2,943,730 in 2002 due to a
higher volume of single family residence mortgage originations because of the
low rate environment. SBA loan servicing income increased from $339,060 in 2001
to $1,129,328 in 2002 due to the increase in the servicing portfolio and
servicing rates on loans sold in 2002, generally at higher rates than in 2001.
The gain on sale of loans was $4,739,335 in 2001, compared to $11,389,023 in
2002 due to significantly higher SBA and mortgage loan sales.
Non-interest expense was $14,831,041 in 2001 compared to $21,800,838 in
2002. Salaries and benefits increased from $9,308,724 in 2001 to $14,866,458 in
2002.
Other expenses increased from $3,201,653 in 2001 to $5,082,210 in 2002 due
to higher loan volume, processing expenses and office related expenses
associated with the general expansion of the Bank.
For 2001, the tax expense was $1,205,018 for an effective rate of 40.0% and
for 2002 the tax expense was $2,874,054 for an effective rate of 40.7%. Deferred
tax assets totaled $819,000 at December 31, 2001 and $1,728,000 at December 31,
2002. Over half of the deferred tax asset is due to the tax deductibility timing
difference of the provision for loan loss.
Temecula Valley Bancorp Inc.
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: March 31, 2003 By: /s/ Donald A. Pitcher
---------------------------
Donald A. Pitcher
Senior Vice President
Chief Financial Officer