Exhibit 99.1
Temecula Valley Bancorp Inc. Announces 38% Increase In Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--Oct. 14, 2005--Temecula Valley Bancorp
Inc.'s (NASDAQ:TMCV) earnings for the quarter ending September 30, 2005 were
$3,285,162 a 38% increase from the $2,374,362 earned in the same period last
year. Net income for the nine months ending September 30, 2005 was $10,229,883
compared to $7,593,138 for the same period last year, a $2,636,745 or 35%
increase. "We are pleased with the results," stated Stephen H. Wacknitz,
President/CEO/Chairman, "considering that for 2005 Temecula Valley Bank (the
Bank) has increased cost associated with its SBA operations, risk management
functions, and has opened a new branch. The Bank has expanded its SBA sales
force and the corresponding support functions by hiring a new National Sales
Manager, Western Regional Sales Manager, and Operations Manager. A new Chief
Risk Officer, Appraisal Department Manager, Human Resources Director, and their
related support staff have been added to strengthen the Bank's risk management
functions. In October, the Bank opened a new branch in Carlsbad. We look forward
to the future benefits of our expansion efforts undertaken in 2005." The return
on average assets was 1.72% for the third quarter and 1.96% for the first nine
months of 2005. The return on average equity was 24.97% for the third quarter
and 28.28% for the first nine months of 2005. The net interest margin for all of
2004 was 5.96% and has improved to 6.68% for the first nine months of 2005 as
the Federal Reserve Bank has continued to increase fed funds rates.
Total assets increased 34%, from $595,246,198 at September 30, 2004 to
$794,832,584 at September 30, 2005. Loans increased 36%, with construction loans
increasing 87%, real estate secured loans increasing 25%, commercial loans
increasing 17% and SBA loans, which include both real estate secured as well as
commercial loans, decreasing 18%. 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 increased from $26,900,000 to $32,240,000. The allowance
for loan loss increased from $5,351,737 at September 30, 2004 to $8,240,198 at
September 30, 2005, a 54% increase which set the allowance for loan loss as a
percent of loans from 1.06% a year earlier to 1.20% at September 30, 2005.
Net loan charge-offs were $111,236 for the first nine months of 2005,
compared to $641,096 for the same period in 2004. Non-accrual loans (net of SBA
guarantees) were $1,781,531 at September 30, 2005 compared to $2,541,320 at
September 30, 2004. There was $75,675 of other real estate owned (net of SBA
guarantees) as of September 30, 2004 compared to $1,507,246 at September 30,
2005.
For the twelve-month period ending September 30, 2005, fixed assets
increased from $3,979,370 to $4,745,390 due to the addition of the full service
office and the addition of loan production offices. The SBA servicing assets
decreased $779,932 due to the average servicing rate slightly decreasing,
partially offset by a higher servicing portfolio.
Deposits increased 33%, from $528,691,420 at September 30, 2004 to
$703,881,319 at September 30, 2005. The continued expansion of existing
branches, as well as various CD promotions 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 in September 2005 of $8,000,000 of trust preferred borrowing, of which
$7,000,000 was transferred to the Bank as tier one capital, and is considered
tier one and tier two capital on a consolidated basis.
Shareholder equity increased from $39,790,676 at September 30, 2004 to
$53,954,273 at September 30, 2005 due to net income and the exercise of stock
options. The capital ratios remain strong, with the tier one leverage ratio of
9.34%, the tier one risk based ratio of 9.04% and the total risk based capital
ratio of 11.45%, 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, El
Cajon and Indian Wells. 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 California, Colorado, Florida, Georgia, Illinois,
Nebraska, New Jersey, Ohio, Oregon, Pennsylvania, Texas, and Washington.
Temecula Valley Bancorp's common stock is quoted in the national Nasdaq market
and trades under the symbol TMCV. 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
SEPTEMBER 2005
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
Increase Increase
Sept. 30, Sept. 30, (Decrease) (Decrease)
2005 2004
------------ ------------ ------------- ------------
ASSETS
Cash and due
from banks 12,666,220 10,362,018 2,304,202 22%
Federal funds
sold 32,240,000 26,900,000 5,340,000 20%
Securities --
held to
maturity 0 0 0 0%
Loans 686,377,936 505,368,986 181,008,950 36%
Less allowance
for loan
losses (8,240,198) (5,351,737) 2,888,461 54%
------------ ------------ --------------
Loans, net 678,137,738 500,017,249 178,120,489 36%
Federal Reserve
& Home Loan
Bank stock,
at cost 2,867,600 2,125,500 742,100 35%
Other real
estate owned,
net 2,111,250 302,698 1,808,552 597%
Bank premises
and equipment,
net 4,745,390 3,979,370 766,020 19%
SBA-loan
servicing
I/O strip
receivable 22,513,631 23,644,223 (1,130,592) (5%)
SBA-loan
servicing
asset 8,059,947 7,709,287 350,660 5%
Cash surrender
value life
insurance 17,392,824 9,494,528 7,898,296 83%
Other Assets 14,097,984 10,711,325 3,386,659 32%
------------ ------------ --------------
794,832,584 595,246,198 199,586,386 34%
============ ============ ==============
LIABILITIES AND
STOCKHOLDER
EQUITY
Demand deposits 153,506,186 138,303,661 15,202,525 11%
Interest
bearing
deposits 550,375,133 390,387,759 159,987,374 41%
------------ ------------ --------------
Total
deposits 703,881,319 528,691,420 175,189,899 33%
FHLB advances 0 0 0 0%
Junior
subordinated
debt securities 28,868,000 20,620,000 8,248,000 40%
Other
liabilities 8,128,992 6,144,102 1,984,890 32%
------------ ------------ --------------
Total
liabilities 740,878,311 555,455,522 185,422,789 33%
Stockholder's
equity 53,954,273 39,790,676 14,163,597 36%
------------ ------------ --------------
794,832,584 595,246,198 199,586,386 34%
============ ============ ==============
3 Mos. 3 Mos. 9 Mos. 9 Mos.
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
------------ ------------ -------------- ------------
Interest income 15,351,569 8,783,386 40,216,507 23,390,660
Interest expense 4,051,121 1,750,845 9,608,558 4,369,049
------------ ------------ -------------- ------------
Net interest
income 11,300,448 7,032,541 30,607,949 19,021,611
Provision for
loan losses 346,000 1,635,000 1,988,900 2,385,000
Other income 5,599,165 7,288,248 18,847,475 20,742,937
Other expense 10,950,340 8,665,678 29,967,152 24,517,997
------------ ------------ -------------- ------------
Earnings before
income taxes 5,603,273 4,020,111 17,499,372 12,861,551
Income taxes 2,318,111 1,645,749 7,269,489 5,268,413
------------ ------------ -------------- ------------
Net earnings 3,285,162 2,374,362 10,229,883 7,593,138
============ ============ ============== ============
Actual common
shares
outstanding
at end of
period 8,879,697 8,690,503 8,879,697 8,690,503
Average common
shares
outstanding 8,870,793 8,662,855 8,829,197 8,432,075
Average common
shares
& equivalents
outstanding 9,659,261 9,481,185 9,562,584 9,335,237
Basic earnings
per share 0.37 0.27 1.16 0.90
Diluted earnings
per share 0.34 0.25 1.07 0.81
Return on
average assets
(annualized) 1.72% 1.69% 1.96% 2.03%
Return on
average equity
(annualized) 24.97% 24.61% 28.28% 29.21%
Efficiency
ratio 64.80% 60.51% 60.59% 61.66%
9/30/2005 9/30/2004
----------- -----------
Tier 1
leverage
capital ratio 9.34% 9.32%
Tier 1
risk-based
capital ratio 9.04% 9.47%
Total
risk-based
capital ratio 11.45% 11.70%
Allowance for
loan losses
as a % of
total loans 1.20% 1.06%
Gross
nonperforming
assets as
a % of total
assets 1.15% 1.71%
Net
nonperforming
assets as
a % of total
assets 0.41% 0.44%
Net chargeoffs
(annualized)
as a % of
total loans 0.02% 0.17%
Loan to deposit
ratio 97.51% 95.59%
Book value per
share 6.08 4.58
PAST DUE AND
NON-ACCRUAL LOANS
- ------------------
Gross Government Net
Balance Guaranty Balance
-------------------------------------
September 30, 2005
- ------------------
30 -- 89 days
past due 1,383,506 (1,176,386) 207,120
============ ============ ===========
90+ days past due
and accruing 0 0 0
Non-accrual 7,029,016 (5,247,485) 1,781,531
Other real estate
owned (REO) 2,111,250 (604,004) 1,507,246
------------ ------------ -----------
Total
non-performing
assets 9,140,266 (5,851,489) 3,288,777
============ ============ ===========
September 30, 2004
- ------------------
30 -- 89 days
past due 862,778 (663,177) 199,601
============ ============ ===========
90+ days past due
and accruing 0 0 0
Non-accrual 9,868,931 (7,327,611) 2,541,320
Other real estate
owned (REO) 302,698 (227,023) 75,675
------------ ------------ -----------
Total
non-performing
assets 10,171,629 (7,554,634) 2,616,995
============ ============ ===========
NET LOAN CHARGEOFFS
- -------------------
3 Mos. 3 Mos. 9 Mos. 9 Mos.
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
------------ ------------ ----------- -----------
Chargeoffs 25,709 328,656 430,534 649,737
Recoveries (80,727) (1,688) (319,298) (8,641)
------------ ------------ ----------- -----------
Net Chargeoffs
(Recoveries) (55,018) 326,968 111,236 641,096
============ ============ =========== ===========
TEMECULA VALLEY BANCORP INC.
FINANCIAL DATA
JUNE 2005
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
June 30, June 30, Increase Increase
2005 2004 (Decrease) (Decrease)
------------ ------------ ------------ -----------
ASSETS
Cash and due
from banks 11,013,343 15,935,851 (4,922,508) (31%)
Federal funds
sold 27,420,000 15,600,000 11,820,000 76%
Securities --
held to maturity 0 0 0 0%
Loans 628,212,313 448,229,019 179,983,294 40%
Less allowance
for loan losses (7,839,179) (4,043,705) 3,795,474 94%
------------ ------------ ------------
Loans, net 620,373,134 444,185,314 176,187,820 40%
Federal Reserve &
Home Loan Bank
stock, at cost 2,849,000 2,050,300 798,700 39%
Other real estate
owned, net 0 1,410,000 (1,410,000) (100%)
Bank premises and
equipment, net 4,763,102 3,006,473 1,756,629 58%
SBA-loan servicing
I/O strip
receivable 23,479,641 21,689,271 1,790,370 8%
SBA-loan servicing
asset 8,102,773 6,944,100 1,158,673 17%
Cash surrender
value life
insurance 13,469,824 7,661,929 5,807,895 76%
Other Assets 12,745,640 9,310,505 3,435,135 37%
------------ ------------ ------------
724,216,457 527,793,743 196,422,714 37%
============ ============ ============
LIABILITIES AND
STOCKHOLDER EQUITY
Demand deposits 147,656,572 126,475,079 21,181,493 17%
Interest bearing
deposits 496,117,418 325,883,728 170,233,690 52%
------------ ------------ ------------
Total deposits 643,773,990 452,358,807 191,415,183 42%
FHLB advances 0 20,000,000 (20,000,000) (100%)
Junior
subordinated
debt securities 20,620,000 12,372,000 8,248,000 67%
Other liabilities 9,338,684 6,152,543 3,186,141 52%
------------ ------------ ------------
Total
liabilities 673,732,674 490,883,350 182,849,324 37%
Stockholder's
equity 50,483,783 36,910,393 13,573,390 37%
------------ ------------ ------------
724,216,457 527,793,743 196,422,714 37%
============ ============ ============
3 Mos. 3 Mos. 6 Mos. 6 Mos.
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
------------ ------------ ------------ -----------
Interest income 13,454,394 7,790,647 24,864,938 14,607,274
Interest expense 3,179,129 1,375,641 5,557,437 2,618,204
------------ ------------ ------------ -----------
Net interest income 10,275,265 6,415,006 19,307,501 11,989,070
Provision for loan
losses 804,100 250,000 1,642,900 750,000
Other income 7,464,814 6,726,899 13,248,310 13,454,688
Other expense 10,180,120 8,407,711 19,016,812 15,852,319
------------ ------------ ------------ -----------
Earnings before
income taxes 6,755,859 4,484,194 11,896,099 8,841,439
Income taxes 2,812,818 1,837,568 4,951,378 3,622,664
------------ ------------ ------------ -----------
Net earnings 3,943,041 2,646,626 6,944,721 5,218,775
============ ============ ============ ===========
Actual common
shares
outstanding at
end of period 8,865,447 8,608,538 8,865,447 8,608,538
Average common
shares
outstanding 8,828,292 8,393,061 8,808,055 8,315,418
Average common
shares
& equivalents
outstanding 9,528,263 9,309,436 9,515,624 9,272,054
Basic earnings per
share 0.45 0.32 0.79 0.63
Diluted earnings
per share 0.41 0.28 0.73 0.56
Return on average
assets
(annualized) 2.28% 2.16% 2.10% 2.23%
Return on average
equity
(annualized) 32.87% 30.60% 30.10% 31.79%
Efficiency ratio 57.38% 63.98% 58.41% 62.30%
6/30/2005 6/30/2004
----------- -----------
Tier 1 leverage
capital ratio 9.54% 9.78%
Tier 1 risk-based
capital ratio 9.40% 9.91%
Total risk-based
capital ratio 11.08% 10.74%
Allowance for loan
losses as a % of
total loans 1.25% 0.90%
Gross nonperforming
assets as a % of
total assets 1.35% 1.46%
Net nonperforming
assets as a % of
total assets 0.45% 0.31%
Net chargeoffs
(annualized) as
a % of total loans 0.05% 0.14%
Loan to deposit
ratio 97.58% 99.09%
Book value per
share 5.69 4.29
PAST DUE AND
NON-ACCRUAL LOANS
- ------------------
Gross Government Net
Balance Guaranty Balance
-----------------------------------
June 30, 2005
- -------------
30 -- 89 days past
due 149,793 0 149,793
=========== =========== ===========
90+ days past due
and accruing 263,218 (244,753) 18,465
Non-accrual 9,474,790 (6,244,901) 3,229,889
Other real estate
owned (REO) 0 0 0
----------- ----------- -----------
Total non-performing
assets 9,738,008 (6,489,654) 3,248,354
=========== =========== ===========
June 30, 2004
- -------------
30 -- 89 days past
due 247,122 (123,052) 124,070
=========== =========== ===========
90+ days past due
and accruing 0 0 0
Non-accrual 6,290,495 (5,006,792) 1,283,703
Other real estate
owned (REO) 1,410,000 (1,057,500) 352,500
----------- ----------- -----------
Total non-performing
assets 7,700,495 (6,064,292) 1,636,203
=========== =========== ===========
NET LOAN CHARGEOFFS
- -------------------
3 Mos. 3 Mos. 6 Mos. 6 Mos.
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- ----------
Chargeoffs 145,137 70,692 404,825 321,081
Recoveries (133,834) (4,600) (238,570) (6,953)
----------- ----------- ----------- ----------
Net Chargeoffs 11,303 66,092 166,255 314,128
=========== =========== =========== ==========
CONTACT: Temecula Valley Bank
Terry Tarrant, 951-506-1060