Exhibit 99.1
Temecula Valley Bank Announces Record Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--July 25, 2006--Temecula Valley Bancorp
Inc. (Nasdaq:TMCV) announces record earnings for the quarter ending June 30,
2006.
"We are very pleased with our continued strong financial
performance," stated Stephen H. Wacknitz, Chairman of the Board, CEO
and President. "Our second quarter profits were $4.53 million, a 15%
increase from the $3.94 million earned in the same period last year.
Net income for the first half of 2006 was $8.51 million, a 23%
increase over the $6.94 million earned in the same period last year.
This outstanding level of profitability was achieved even after the
significant costs incurred as a result of the new expense requirements
associated with stock options."
The net interest income for the quarter ending June 30, 2006 was
$14.54 million, a 41% increase from the $10.28 million earned in the
same period last year, primarily due to the increase in loans
outstanding and a slight improvement in net interest margin.
Return on average assets was 1.90% and return on average equity
was 27.71% for the quarter ending June 30, 2006. For the first half of
the year, the return on average assets was 1.86% and the return on
average equity was 27.19%. Based on our industry's historical
performance, this places the Bank among the top performers in the
country.
Total assets were $1,028.23 million at June 30, 2006, a 42%
increase from $724.22 million at June 30, 2005. For the same period,
loans increased 47%. The increase in loans was due to continuing
strong lending activity in the markets we serve.
The allowance for loan loss increased by 30% from $7.84 million at
June 30, 2005 to $10.17 million at June 30, 2006. Net charge-offs were
$166 thousand for the first six months of 2005 and $279 thousand for
the same period in 2006. Non-accrual loans (net of SBA guarantees)
were down 56% from the $3.23 million at June 30, 2005 to $1.43 million
at June 30, 2006. There was no other real estate owned (net of SBA
guarantees) at June 30, 2005 compared to $318 thousand at June 30,
2006.
Deposits increased 43% from $643.77 million at June 30, 2005 to
$921.94 million at June 30, 2006. Continued deposit growth has been
fueled at existing branches, through the various CD promotions, from
money desk operations and at our new Carlsbad full service branch.
Deposit growth is expected to be sufficient to fund future loan
growth.
Shareholder equity increased 35% from $50.48 million at June 30,
2005 to $67.93 million at June 30, 2006, due primarily to net income
and the exercise of stock options. The capital ratios remain strong at
June 30, 2006, with the tier one leverage ratio of 9.37%, the tier one
risk based ratio of 8.72% and the total risk based capital ratio of
10.26%, all above the minimum to qualify as "well capitalized."
"A new milestone has been achieved with assets growing to over $1
billion in just nine and a half years. This growth has been achieved
while remaining one of the most profitable banks in the nation," said
Mr. Wacknitz. "We were recently recognized among the top six percent
of all financial institutions nationally by Sandler O'Neill &
Partners, L.P., as a top-performing small-cap company receiving their
prestigious 'Sm-All Stars' ranking. In addition, compared to all
publicly traded community banks in the United States as of year end
2005 with assets of less than $1 billion, we were ranked the number
one top performing bank in the July issue of US Banker magazine, based
on a three-year average return on equity of 29.39%. Also in July,
Temecula Valley Bancorp was included in the new NASDAQ Global Select
Market, which has the highest initial listing standards of any
exchange in the world based on financial and liquidity requirements.
We are truly proud to be recognized for these significant
accomplishments," added Mr. Wacknitz.
Temecula Valley Bank was established in 1996 and operates full
service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido,
Rancho Bernardo, El Cajon and Carlsbad. The Bank also operates a
number of regional real estate loan production centers in California.
Temecula Valley Bancorp was established in June 2002 and operates as a
bank holding company for the Bank. As a nationally authorized SBA
Preferred Lender, the locally owned and operated Bank has multiple SBA
loan production offices across the United States and has funded over a
billion dollars in SBA loans in 33 states in the last five years.
Temecula Valley Bancorp's common stock is listed on The NASDAQ Global
Select 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 the filings made with Securities and Exchange Commission
by Temecula Valley Bancorp Inc.
TEMECULA VALLEY BANCORP INC.
FINANCIAL DATA
JUNE 2006
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
June 30, June 30, Increase Increase
2006 2005 (Decrease) (Decrease)
-------------- ------------ ------------ ----------
ASSETS
Cash and due from
banks 15,063,434 11,013,343 4,050,091 37%
Due from Banks-
Time 99,000 0 99,000 0%
Federal funds sold 27,400,000 27,420,000 33,200 0%
Loans 924,503,883 628,212,313 296,291,570 47%
Less allowance for
loan losses (10,170,099) (7,839,179) (2,330,920) 30%
-------------- ------------ ------------
Loans, net 914,333,784 620,373,134 293,960,650 47%
Federal Reserve &
Home Loan Bank
stock, at cost 3,189,000 2,849,000 340,000 12%
Other real estate
owned, net 727,500 0 727,500 0%
Bank premises and
equipment, net 5,068,274 4,763,102 305,172 6%
SBA-loan servicing
asset 8,569,660 8,102,773 466,887 6%
SBA-loan servicing
I/O strip
receivable 17,311,101 23,479,641 (6,168,540) (26%)
Cash surrender
value life
insurance 21,595,034 13,469,824 8,125,210 60%
Other Assets 14,869,924 12,745,640 2,124,284 17%
-------------- ------------ ------------
1,028,226,711 724,216,457 304,063,454 42%
============== ============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Demand deposits 158,857,579 147,656,572 11,201,007 8%
Interest bearing
deposits 763,083,938 496,117,418 266,966,520 54%
-------------- ------------ ------------
Total deposits 921,941,517 643,773,990 278,167,527 43%
Junior
subordinated debt
securities 28,868,000 20,620,000 8,248,000 40%
Other liabilities 9,485,411 9,338,684 146,727 2%
-------------- ------------ ------------
Total liabilities 960,294,928 673,732,674 286,562,254 43%
Stockholders'
equity 67,931,783 50,483,783 17,448,000 35%
-------------- ------------ ------------
1,028,226,711 724,216,457 304,010,254 42%
============== ============ ============
3 Mos. 3 Mos. 6 Mos. 6 Mos.
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Interest income 21,911,577 13,454,394 41,332,040 24,864,938
Interest expense 7,374,540 3,179,129 13,426,962 5,557,437
----------- ----------- ----------- -----------
Net interest income 14,537,037 10,275,265 27,905,078 19,307,501
Provision for loan
losses 1,096,000 804,100 1,410,000 1,642,900
Other income 6,475,149 7,464,814 11,415,791 13,248,310
Other expense 12,053,453 10,180,120 23,130,849 19,016,812
----------- ----------- ----------- -----------
Earnings before income
taxes 7,862,733 6,755,859 14,780,020 11,896,099
Income taxes 3,332,958 2,812,818 6,269,719 4,951,378
----------- ----------- ----------- -----------
Net earnings 4,529,775 3,943,041 8,510,301 6,944,721
=========== =========== =========== ===========
Actual common shares
outstanding at end of
period 9,140,755 8,865,447 9,140,755 8,865,447
Average common shares
outstanding 9,025,994 8,828,292 8,990,537 8,808,055
Average common shares &
equivalents
outstanding 9,606,151 9,528,263 9,546,876 9,515,624
Basic earnings per
share 0.50 0.45 0.95 0.79
Diluted earnings per
share 0.47 0.41 0.89 0.73
Return on average
assets (annualized) 1.90% 2.28% 1.86% 2.10%
Return on average
equity (annualized) 27.71% 32.87% 27.19% 30.10%
Efficiency ratio 57.36% 57.38% 58.83% 58.41%
06/30/2006 06/30/2005
---------------- --------------
Tier 1 leverage capital ratio 9.37% 9.54%
Tier 1 risk-based capital ratio 8.72% 9.40%
Total risk-based capital ratio 10.26% 11.08%
Allowance for loan losses as a % of
total loans 1.10% 1.25%
Gross nonperforming assets as a % of
total assets 0.87% 1.35%
Net nonperforming assets as a % of
total assets 0.17% 0.45%
Net chargeoffs (annualized) as a % of
total loans 0.06% 0.05%
Loan to deposit ratio 100.28% 97.58%
Book value per share 7.43 5.69
PAST DUE AND NON-ACCRUAL LOANS
- ------------------------------------ ---------- ----------- ----------
Gross Government Net
Balance Guaranty Balance
---------- ----------- ----------
June 30, 2006
- ------------------------------------
30 - 89 days past due 2,044,141 (1,180,653) 863,488
========== =========== ==========
90+ days past due and accruing 0 0 0
Non-accrual 8,257,182 (6,831,621) 1,425,561
Other real estate owned (REO) 727,500 (409,424) 318,076
---------- ----------- ----------
Total non-performing assets 8,984,682 (7,241,045) 1,743,637
========== =========== ==========
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
========== =========== ==========
NET LOAN CHARGEOFFS
- --------------------------------
3 Mos. 3 Mos. 6 Mos. 6 Mos.
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
-------- --------- -------- ---------
Chargeoffs 139,691 145,137 295,882 404,825
Recoveries (15,985) (133,834) (16,826) (238,570)
-------- --------- -------- ---------
Net Chargeoffs (Recoveries) 123,706 11,303 279,056 166,255
======== ========= ======== =========
CONTACT: Temecula Valley Bank
Stephen H. Wacknitz, 951-694-9940