Exhibit 99.1
Temecula Valley Bancorp Inc. Announces
32% Increase in Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--Jan. 23, 2006--Temecula Valley
Bancorp Inc. (NASDAQ:TMCV) announced that earnings for the quarter
ended December 31, 2005 were $3,723,382, a 25% increase from the
$2,984,485 earned in the same period last year. Net income for the
year ended December 31, 2005 was $13,953,265, compared to $10,577,623
for the same period last year, a $3,375,642 or 32% increase. Return on
average assets was 1.79% for the fourth quarter and 1.91% for the year
ended December 31, 2005. The return on average equity was 26.44% for
the fourth quarter and 27.71% for the year ended December 31, 2005.
The net interest margin for all of 2004 was 5.96% and has improved to
6.78% for the year ended December 31, 2005 as the Federal Reserve Bank
has continued to increase fed funds rates.
"We are very pleased with the results," stated Stephen H.
Wacknitz, President/CEO/Chairman, "considering that for 2005 Temecula
Valley Bank (the Bank) has increased infrastructure costs to
accommodate its strong organic grow. A new Chief Risk Officer,
Appraisal Department Manager, Human Resources Director, Information
Technology Director and their related support staff have been added to
strengthen the Bank's infrastructure and risk management functions.
Additionally, the Bank has continued to expand its SBA sales force and
the corresponding support functions by hiring National, Western
Regional and Eastern Regional Sales Managers and an Operations
Manager. During 2005, the Bank also incurred additional costs related
to opening two new branches. We look forward to the future benefits of
our expansion efforts undertaken in 2005 and feel that our
infrastructure is poised for continued strong, measured and prudent
organic growth."
Total assets increased 43%, from $606,827,529 at December 31, 2004
to $868,988,046 at December 31, 2005. Loans increased 42%, with
construction loans increasing 89%, real estate secured loans
increasing 27%, commercial loans increasing 56% and SBA loans, which
include both real estate secured as well as commercial loans,
decreasing 17%. 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 $16,800,000 to $33,200,000. The
allowance for loan loss increased from $6,362,534 at December 31, 2004
to $9,039,155 at December 31, 2005, a 42% increase which set the
allowance for loan loss as a percent of loans at 1.20% a year earlier
and 1.20% at December 31, 2005.
Net loan charge-offs were $220,379 for the year ended December 31,
2005, compared to $1,066,600 for the same period in 2004. Non-accrual
loans (net of SBA guarantees) were $1,436,079 at December 31, 2005,
compared to $3,659,079 at December 31, 2004. There was $75,675 of
other real estate owned (net of SBA guarantees) as of December 31,
2004, compared to $1,507,246 at December 31, 2005.
For the twelve-month period ended December 31, 2005, fixed assets
increased from $4,379,809 to $4,885,015 due to the addition of the
full service offices and the addition of loan production offices. The
SBA servicing assets decreased $2,028,059 due to the average servicing
rate slightly decreasing, partially offset by a higher servicing
portfolio.
Deposits increased 39%, from $534,766,705 at December 31, 2004 to
$742,431,939 at December 31, 2005. The continued expansion of existing
branches, as well as various CD promotions, has 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 $42,902,538 at December 31, 2004
to $58,180,310 at December 31, 2005 mainly due to net income and the
exercise of stock options. The capital ratios remain strong, with the
tier one leverage ratio of 9.28%, the tier one risk based ratio of
8.93% and the total risk based capital ratio of 11.02%, all easily
above the minimum to qualify as "well capitalized."
During the year ended December 31, 2005, the Temecula Valley
Bancorp Inc. announced that its stock would be traded on the Nasdaq
National Market. During the year ended December 31, 2005, the Bank
received the SBA's approval for SBA Preferred Lenders Program Lending
Status in all districts nationwide.
Temecula Valley Bank was established in 1996 and operates full
service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido,
Rancho Bernardo, El Cajon and Carlsbad. 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 various locations throughout the United States. Temecula Valley
Bancorp's common stock is listed on 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
December 2005
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
Increase Increase
Dec 31, 2005 Dec 31, 2004 (Decrease) (Decrease)
------------- ------------ ------------ ----------
ASSETS
Cash and due from
banks $ 18,311,714 $ 6,317,261 $ 11,994,453 190%
Federal funds
sold 33,200,000 16,800,000 16,400,000 98%
Loans 753,246,789 530,196,252 223,050,537 42%
Less allowance
for loan losses (9,039,155) (6,362,534) 2,676,621 42%
------------- ------------ ------------
Loans, net 744,207,634 523,833,718 220,373,916 42%
Federal Reserve &
Home Loan Bank
stock, at cost 3,098,600 2,377,800 720,800 30%
Other real estate
owned, net 2,111,250 302,698 1,808,552 597%
Bank premises and
equipment, net 4,885,015 4,379,809 505,206 12%
SBA-loan
servicing I/O
strip
receivable 22,067,900 24,679,520 (2,611,620) (11%)
SBA-loan
servicing asset 8,169,273 7,585,712 583,561 8%
Cash surrender
value life
insurance 17,590,733 9,593,824 7,996,909 83%
Other Assets 15,345,927 10,957,187 4,388,740 40%
------------- ------------ ------------
868,988,046 606,827,529 262,160,517 43%
============= ============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Demand deposits 155,992,027 138,041,385 17,950,642 13%
Interest bearing
deposits 586,439,912 396,725,320 189,714,592 48%
------------- ------------ ------------
Total deposits 742,431,939 534,766,705 207,665,234 39%
FHLB advances 30,000,000 0 30,000,000 100%
Junior
subordinated debt
securities 28,868,000 20,620,000 8,248,000 40%
Other liabilities 9,507,797 8,538,286 969,511 11%
------------- ------------ ------------
Total
liabilities 810,807,736 563,924,991 246,882,745 44%
Stockholders'
equity 58,180,310 42,902,538 15,277,772 36%
------------- ------------ ------------
$868,988,046 $606,827,529 $262,160,517 43%
============= ============ ============
3 Mos. 3 Mos. 12 Mos. 12 Mos.
Ended Ended Ended Ended
Dec 31, 2005 Dec 31, 2004 Dec 31, 2005 Dec 31, 2004
------------ ------------ ------------ ------------
Interest income $17,908,753 $10,224,227 $58,125,260 $33,614,887
Interest expense 4,975,226 2,045,494 14,583,784 6,414,543
------------ ------------ ----------- ------------
Net interest
income 12,933,527 8,178,733 43,541,476 27,200,344
Provision for loan
losses 908,100 1,436,300 2,897,000 3,821,300
Other income 4,974,688 7,955,677 23,822,163 28,698,614
Other expense 10,660,150 9,446,232 40,627,302 33,964,229
------------ ------------ ------------ ------------
Earnings before
income taxes 6,339,965 5,251,878 23,839,337 18,113,429
Income taxes 2,616,583 2,267,393 9,886,072 7,535,806
------------ ------------ ------------ ------------
Net earnings $ 3,723,382 $ 2,984,485 $13,953,265 $10,577,623
============ ============ ============ ============
Actual common
shares
outstanding at
end of period 8,897,697 8,752,603 8,897,697 8,752,603
Average common
shares
outstanding 8,894,814 8,714,943 8,845,736 8,503,179
Average common
shares &
equivalents
outstanding 9,650,105 9,475,367 9,587,559 9,363,868
Basic earnings per
share 0.42 0.34 1.58 1.24
Diluted earnings
per share 0.39 0.31 1.46 1.13
Return on average
assets
(annualized) 1.79% 1.94% 1.91% 2.00%
Return on average
equity
(annualized) 26.44% 28.74% 27.71% 28.94%
Efficiency ratio 59.53% 58.55% 60.31% 60.76%
12/31/2005 12/31/2004
---------------- --------------
Tier 1 leverage capital ratio 9.28% 9.20%
Tier 1 risk-based capital ratio 8.93% 9.68%
Total risk-based capital ratio 11.02% 11.81%
Allowance for loan losses as a % of
total loans 1.20% 1.20%
Gross nonperforming assets as a % of
total assets 1.16% 1.99%
Net nonperforming assets as a % of
total assets 0.34% 0.62%
Net charge-offs (annualized) as a % of
total loans 0.03% 0.20%
Loan to deposit ratio 101.46% 99.15%
Book value per share 6.54 4.90
PAST DUE AND NON-ACCRUAL LOANS Gross Government Net
Balance Guaranty Balance
---------------------------------- ----------------------- ----------
December 31, 2005
----------------------------------
30-89 days past due 933,294 (732,923) 200,371
=========== =========== ==========
90+ days past due and accruing 0 0 0
Non-accrual 7,950,601 (6,513,752) 1,436,849
Other real estate owned (REO) 2,111,250 (604,004) 1,507,246
----------- ----------- ----------
Total nonperforming assets 10,061,851 (7,117,756) 2,944,095
=========== =========== ==========
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 nonperforming assets 12,102,044 (8,367,290) 3,734,754
=========== =========== ==========
NET LOAN CHARGE-OFFS 3 Mos. 3 Mos. 12 Mos. 12 Mos.
Ended Ended Ended Ended
Dec 31, Dec 31, Dec 31, Dec 31,
2005 2004 2005 2004
------------------------------ -------- -------- --------- ----------
Charge-offs 109,618 446,961 540,152 1,096,698
Recoveries (475) (21,458) (319,773) (30,098)
-------- -------- --------- ----------
Net Charge-offs (Recoveries) 109,143 425,503 220,379 1,066,600
======== ======== ========= ==========
CONTACT: Temecula Valley Bancorp Inc.
Terry Tarrant, 951-506-1060
ttarrant@temvalbank.com