Exhibit 99.1
Temecula Valley Bancorp Inc. Announces Record Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--Jan. 26, 2005--Temecula Valley
Bancorp Inc. (OTCBB:TMCV) announced earnings for the quarter ending
December 31, 2004, were $2,984,485, a 40% increase from the $2,130,887
earned in the same period last year. Net income for the twelve months
ending December 31, 2004, was $10,577,623, compared to $7,854,339 for
the same period last year, a $2,723,284, or 35%, increase. "We are
pleased with the results," stated Stephen H. Wacknitz, President/CEO,
"considering that for 2004 the provision for loan losses was increased
from $1,022,000 last year to $3,821,300 this year, and a $487,000
reserve for undisbursed loans was set up in 2004." The $487,000
reserve for undisbursed loans is not included in the allowance for
loan loss, which increased from $3,607,834 at December 31, 2003, to
$6,362,534 at December 31, 2004. Also included in the expenses for
2004 are the start up expenses associated with the opening of the
Rancho Bernardo full service office in June, the Corona full service
office in August, and a loan production office in San Rafael in July.
The net interest margin for 2004 was 5.96% and should continue to
improve as the Federal Reserve Bank increases rates.
Total assets increased 41%, from $431,212,118 at December 31,
2003, to $606,827,529 at December 31, 2004. Loans increased 47%, with
construction loans increasing 79%, real estate secured loans
increasing 47%, and commercial loans decreasing 29%. SBA loans, which
include both real estate secured as well as commercial loans,
increased 16%. The large increase in construction loans was due to
increased tract housing construction, the addition of the loan
production office in San Rafael, and the general overall robust real
estate market in Southern California.
Federal funds sold decreased from $21,400,000 to $16,800,000. The
allowance for loan loss increased from $3,607,834 at December 31,
2003, to $6,362,534 at December 31, 2004, a 76% increase which set the
allowance for loan loss as a percent of loans from 1.00% a year
earlier to 1.20% at December 31, 2004.
Net charge-offs were $1,066,600 for 2004, compared to $431,562 for
the same period in 2003. Non-accrual loans (net of SBA guarantees)
were $3,659,079 at December 31, 2004, compared to $1,495,396 at
December 31, 2003. Other real estate owned (net of SBA guarantees) was
$75,675 at December 31, 2004, compared to $485,036 at December 31,
2003.
For the twelve-month period, fixed assets increased from
$2,185,543 to $4,379,809 due to the addition of two full service
offices, the construction of a new location for the Escondido office,
and a few loan production offices. The SBA servicing assets increased
due to SBA 7A loan sales in the secondary market.
Deposits increased 39%, from $383,487,366 at December 31, 2003, to
$534,766,705 at December 31, 2004. The continued expansion of existing
branches as well as various CD promotions and the two new branches
have fueled the deposit growth. Deposit growth is expected to be
sufficient in the future to fund loan growth.
Junior subordinated debt securities increased $8,248,000 due to
the net addition of $8,000,000 of trust preferred borrowing that was
transferred to the Bank as tier one capital, and is considered tier
one and tier two capital on a consolidated basis. Included in other
liabilities is a $487,000 reserve for undisbursed loans, which was set
up in 2004. The related $487,000 expense is reflected in other
expense.
Shareholder equity increased from $29,683,065 at December 31,
2003, to $42,902,538 at December 31, 2004, due to net income and the
exercise of stock options. The capital ratios remain strong, with the
tier one leverage ratio of 9.20%, the tier one risk based ratio of
9.77%, and the total risk-based capital ratio of 11.91%, all easily
above the minimum to qualify as "well capitalized."
Temecula Valley Bank was established in 1996 and operates full
service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido,
Rancho Bernardo, and El Cajon. Temecula Valley Bancorp was established
in June 2002 and operates as a one-bank holding company for Temecula
Valley Bank. As a Preferred Lender (PLP) since 1998, the locally-owned
and operated bank also has SBA loan production offices in Sherman
Oaks, Fresno, Chico, and Anaheim Hills, Calif.; Bellevue, Wash.;
Gurnee, Ill.; Westlake, Ohio; Ocean City, N.J.; Tampa/St. Petersburg,
Coral Springs, and Jacksonville, Fla.; and Atlanta, Ga.
Temecula Valley Bancorp's common stock is quoted in the over the
counter market and trades under the symbol TMCV.OB. The Bank's website
is 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 United States
government, and general economic conditions. Additional information on
these and other factors that could affect financial results are
included in its Securities and Exchange Commission filings.
TEMECULA VALLEY BANCORP INC.
FINANCIAL DATA
DECEMBER 2004
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
Dec. 31, Dec. 31, Increase Increase
2004 2003 (Decrease) (Decrease)
------------ ------------ ----------------------
ASSETS
Cash and due from
banks 6,317,261 9,348,013 (3,030,752) (32%)
Federal funds sold 16,800,000 21,400,000 (4,600,000) (21%)
Securities - held to
maturity 0 0 0 0%
Loans 530,196,252 360,749,389 169,446,863 47%
Less allowance for
loan losses (6,362,534) (3,607,834) 2,754,700 76%
------------ ------------ ------------
Loans, net 523,833,718 357,141,555 166,692,163 47%
Federal Reserve &
Home Loan Bank
stock, at cost 2,377,800 1,145,000 1,232,800 108%
Other real estate
owned, net 302,698 485,036 (182,338) (38%)
Bank premises and
equipment, net 4,379,809 2,185,543 2,194,266 100%
SBA-loan servicing
I/O strip
receivable 24,679,520 20,495,511 4,184,009 20%
SBA-loan servicing
asset 7,585,712 6,116,680 1,469,032 24%
Cash surrender value
life insurance 9,593,824 5,740,729 3,853,095 67%
Other Assets 10,957,187 7,154,051 3,803,136 53%
------------ ------------ ------------
606,827,529 431,212,118 175,615,411 41%
============ ============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Demand deposits 138,041,385 112,367,018 25,674,367 23%
Interest bearing
deposits 396,725,320 271,120,348 125,604,972 46%
------------ ------------ ------------
Total deposits 534,766,705 383,487,366 151,279,339 39%
Junior subordinated
debt securities 20,620,000 12,372,000 8,248,000 67%
Other liabilities 8,538,286 5,669,687 2,868,599 51%
------------ ------------ ------------
Total liabilities 563,924,991 401,529,053 162,395,938 40%
Stockholders' equity 42,902,538 29,683,065 13,219,473 45%
------------ ------------ ------------
606,827,529 431,212,118 175,615,411 41%
============ ============ ============
3 Mos 3 Mos 12 Mos 12 Mos
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2004 2003 2004 2003
----------- ---------- ----------- -----------
Interest income 10,224,227 6,448,468 33,614,887 23,890,500
Interest expense 2,045,494 1,267,118 6,414,543 4,946,553
----------- ---------- ----------- -----------
Net interest income 8,178,733 5,181,350 27,200,344 18,943,947
Provision for loan
losses 1,436,300 372,000 3,821,300 1,022,000
Other income 7,955,677 6,506,647 28,698,614 24,481,351
Other expense 9,446,232 7,715,613 33,964,229 29,121,070
----------- ---------- ----------- -----------
Earnings before income
taxes 5,251,878 3,600,384 18,113,429 13,282,228
Income taxes 2,267,393 1,469,497 7,535,806 5,427,889
----------- ---------- ----------- -----------
Net earnings 2,984,485 2,130,887 10,577,623 7,854,339
=========== ========== =========== ===========
Actual common shares
outstanding at end of
period 8,752,603 8,151,914 8,752,603 8,151,914
Average common shares
outstanding 8,714,943 8,130,796 8,503,179 7,823,950
Average common shares &
equivalents
outstanding 9,475,367 9,091,184 9,363,868 8,861,706
Basic earnings per
share 0.34 0.26 1.24 1.00
Diluted earnings per
share 0.31 0.23 1.13 0.89
Return on average
assets (annualized) 1.94% 1.97% 2.00% 2.04%
Return on average
equity (annualized) 28.74% 29.65% 28.94% 31.84%
Efficiency ratio 58.55% 66.01% 60.76% 67.06%
12/31/2004 12/31/2003
----------- -----------
Tier 1 leverage capital ratio 9.20% 9.06%
Tier 1 risk-based capital ratio 9.77% 10.01%
Total risk-based capital ratio 11.91% 11.54%
Allowance for loan losses as a % of total
loans 1.20% 1.00%
Gross nonperforming assets as a % of total
assets 1.99% 1.68%
Net nonperforming assets as a % of total
assets 0.62% 0.46%
Net chargeoffs (annualized) as a % of total
loans 0.20% 0.12%
Loan to deposit ratio 99.15% 94.07%
Book value per share 4.90 3.64
All share and per share data adjusted for a two-for-one common stock
split effective December 2003.
PAST DUE AND NON-ACCRUAL LOANS
- ----------------------------------------------------------------------
Gross Government Net
Balance Guaranty Balance
----------- ----------- ----------
December 31, 2004
- -----------------------------------
30-89 days past due 11,203 0 11,203
=========== =========== ==========
90+ days past due and accruing 0 0 0
Non-accrual 11,799,346 (8,140,267) 3,659,079
Other real estate owned (REO) 302,698 (227,023) 75,675
----------- ----------- ----------
Total non-performing assets 12,102,044 (8,367,290) 3,734,754
=========== =========== ==========
December 31, 2003
- -----------------------------------
30-89 days past due 3,243,706 (582,205) 2,661,501
=========== =========== ==========
90+ days past due and accruing 0 0 0
Non-accrual 6,764,713 (5,269,317) 1,495,396
Other real estate owned (REO) 485,036 0 485,036
----------- ----------- ----------
Total non-performing assets 7,249,749 (5,269,317) 1,980,432
=========== =========== ==========
NET LOAN CHARGEOFFS
- ----------------------------------------------------------------------
3 Mos 3 Mos 12 Mos 12 Mos
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2004 2003 2004 2003
-------- -------- ---------- --------
Chargeoffs 446,961 163,816 1,096,698 505,586
Recoveries (21,458) (28,378) (30,098) (74,024)
-------- -------- ---------- --------
Net Chargeoffs 425,503 135,438 1,066,600 431,562
======== ======== ========== ========
CONTACT: Temecula Valley Bancorp Inc.
Stephen H. Wacknitz, 951-694-9940