EXHIBIT 99.1
Temecula Valley Bank Announces 22% Increase in Third Quarter Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--Oct. 18, 2006--Temecula Valley
Bancorp Inc. (NASDAQ:TMCV) announces a 22% increase in earnings for
the quarter ending September 30, 2006.
"We are very pleased with our continued strong financial
performance," stated Stephen H. Wacknitz, Chairman of the Board, CEO
and President. "Our third quarter profits were $4.0 million, a 22%
increase from the $3.3 million earned in the same period last year.
Net income for the first nine months of 2006 was $12.5 million, a 22%
increase over the $10.2 million earned in the same period last year."
Net interest income for the quarter ending September 30, 2006 was
$15.6 million, a 38% increase from the $11.3 million earned in the
same period last year. The increase was primarily due to the increase
in loans outstanding.
Return on average assets was 1.48% and return on average equity
was 22.72% for the quarter ending September 30, 2006. For the first
nine months of the year, the return on average assets was 1.72% and
the return on average equity was 25.85%. "Based on our industry's
historical performance this places us among the top performers in the
country," stated Steve Wacknitz.
Total assets were $1.14 billion at September 30, 2006, a 44%
increase from $794.8 million at September 30, 2005. For the same
period, loans increased 55%. "The increase in loans was due to
continued strong lending activity in the markets we serve as well as
adding new profit centers, including the SBA unguaranteed purchase
program, whose outstanding loans have surpassed $100 million within
the first six months of operation," stated Steve Wacknitz.
The allowance for loan loss increased 41%, from $8.2 million at
September 30, 2005 to $11.6 million at September 30, 2006. Net
charge-offs were $111 thousand for the first nine months of 2005 and
$168 thousand for the same period in 2006. Non-accrual loans (net of
SBA guarantees) were $1.8 million at September 30, 2005 and $2.8
million at September 30, 2006. There was $1.5 million of other real
estate owned (net of SBA guarantees) at September 30, 2005 compared to
$973 thousand at September 30, 2006.
Deposits increased 45% from $703.9 million at September 30, 2005
to $1.02 billion at September 30, 2006. The deposit growth has been
fueled by existing branch growth, through various CD promotions, from
money desk operations, and from our new Carlsbad and Solana Beach full
service branches.
Shareholder equity increased 35% from $53.9 million at September
30, 2005 to $73.0 million at September 30, 2006, due primarily to net
income and the exercise of stock options. Capital ratios remain strong
at September 30, 2006, with the tier one leverage ratio at 8.94%, the
tier one risk-based ratio at 8.31% and the total risk-based capital
ratio at 10.69% all above the minimum to qualify as "well
capitalized." During the third quarter of 2006, $12 million of junior
subordinated debt securities were issued, of which $11.5 million was
transferred to Temecula Valley Bank as tier one capital.
"With the recent trends in the California real estate market the
Bank remains strong with 95% of its loans secured by real estate with
an overall loan to value of 65%. Additionally, we believe that other
major economic indicators in California remain strong," stated Steve
Wacknitz.
Temecula Valley Bank was established in 1996 and operates full
service offices in Temecula, Murrieta, Corona, Fallbrook, Escondido,
Rancho Bernardo, El Cajon, Carlsbad and Solana Beach. The Bank also
operates a number of regional real estate loan production centers in
California. 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. The Bank's website
is at www.temvalbank.com. Temecula Valley Bancorp was established in
June 2002 and operates as a bank holding company for the Bank.
Temecula Valley Bancorp stock is traded on the NASDAQ Global
Select Market under the symbol TMCV.
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
SEPTEMBER 2006
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
Sept 30, Sept 30, Increase Increase
2006 2005 (Decrease) (Decrease)
-------------- ------------ ------------ ----------
ASSETS
Cash and due from
banks 16,453,334 12,666,220 3,787,114 30%
Due from Banks-
Time 99,000 0 99,000 0%
Federal funds
sold 4,350,000 32,240,000 (27,890,000) (87%)
Loans 1,061,515,364 686,377,936 375,137,428 55%
Less allowance
for loan losses (11,631,171) (8,240,198) (3,390,973) 41%
-------------- ------------ ------------
Loans, net 1,049,884,193 678,137,738 371,746,455 55%
Federal Reserve &
Home Loan Bank
stock, at cost 1,969,000 2,867,600 (898,600) (31%)
Other real estate
owned, net 2,130,500 2,111,250 19,250 1%
Bank premises and
equipment, net 5,171,998 4,745,390 426,608 9%
SBA-loan
servicing asset 8,402,234 8,059,947 342,287 4%
SBA-loan
servicing I/O
strip receivable 14,883,673 22,513,631 (7,629,958) (34%)
Cash surrender
value life
insurance 22,316,484 17,392,824 4,923,660 28%
Other Assets 18,310,946 14,097,984 4,212,962 30%
-------------- ------------ ------------
1,143,971,362 794,832,584 349,138,778 44%
============== ============ ============
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Demand deposits 155,444,790 153,506,186 1,938,604 1%
Interest bearing
deposits 862,010,600 550,375,133 311,635,467 57%
-------------- ------------ ------------
Total deposits 1,017,455,390 703,881,319 313,574,071 45%
Junior
subordinated
debt securities 41,240,000 28,868,000 12,372,000 43%
Other liabilities 12,315,798 8,128,992 4,186,806 52%
-------------- ------------ ------------
Total
liabilities 1,071,011,188 740,878,311 330,132,877 45%
Stockholders'
equity 72,960,174 53,954,273 19,005,901 35%
-------------- ------------ ------------
1,143,971,362 794,832,584 349,138,778 44%
============== ============ ============
3 Mos. 3 Mos. 9 Mos. 9 Mos.
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Interest income 25,201,017 15,351,569 66,533,057 40,216,507
Interest expense 9,608,106 4,051,121 23,035,068 9,608,558
----------- ----------- ----------- -----------
Net interest income 15,592,911 11,300,448 43,497,989 30,607,949
Provision for loan
losses 1,350,000 346,000 2,760,000 1,988,900
Other income 4,332,786 5,599,165 15,748,577 18,847,475
Other expense 11,603,993 10,950,340 34,734,842 29,967,152
----------- ----------- ----------- -----------
Earnings before income
taxes 6,971,704 5,603,273 21,751,724 17,499,372
Income taxes 2,953,999 2,318,111 9,223,718 7,269,489
----------- ----------- ----------- -----------
Net earnings 4,017,705 3,285,162 12,528,006 10,229,883
=========== =========== =========== ===========
Actual common shares
outstanding at end of
period 9,169,088 8,879,697 9,169,088 8,879,697
Average common shares
outstanding 9,149,922 8,870,793 9,044,249 8,829,197
Average common shares
& equivalents
outstanding 9,742,530 9,659,261 9,611,518 9,562,584
Basic earnings per
share 0.44 0.37 1.39 1.16
Diluted earnings per
share 0.41 0.34 1.30 1.07
Return on average
assets (annualized) 1.48% 1.72% 1.72% 1.96%
Return on average
equity (annualized) 22.72% 24.97% 25.85% 28.28%
Efficiency ratio 58.24% 64.80% 58.63% 60.59%
09/30/2006 09/30/2005
----------- -----------
Tier 1 leverage
capital ratio 8.94% 9.34%
Tier 1 risk-based
capital ratio 8.31% 9.04%
Total risk-based
capital ratio 10.69% 11.45%
Allowance for loan
losses as a % of
total loans 1.10% 1.20%
Gross nonperforming
assets as a % of
total assets 1.21% 1.15%
Net nonperforming
assets as a % of
total assets 0.33% 0.41%
Net charge-offs
(annualized) as a %
of total loans 0.02% 0.02%
Loan to deposit ratio 104.33% 97.51%
Book value per share 7.96 6.08
PAST DUE AND NON-ACCRUAL LOANS
- ---------------------------------- -----------------------------------
Sept 30, 2006 Gross Government Net
Balance Guaranty Balance
- ---------------------------------- -----------------------------------
30-89 days past due 379,985 (160,617) 219,368
=========== ============ ==========
90+ days past due and accruing 0 0 0
Non-accrual 11,669,599 (8,858,481) 2,811,118
Other real estate owned (REO) 2,130,500 (1,157,924) 972,576
----------- ------------ ----------
Total nonperforming assets 13,800,099 (10,016,405) 3,783,694
=========== ============ ==========
Sept 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 nonperforming assets 9,140,266 (5,851,489) 3,288,777
=========== ============ ==========
NET LOAN CHARGE-OFFS
- -------------------------------
3 Mos. 3 Mos. 9 Mos. 9 Mos.
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2006 2005 2006 2005
--------- -------- --------- ---------
Charge-offs 60,713 25,709 356,594 430,534
Recoveries (171,785) (80,727) (188,611) (319,298)
--------- -------- --------- ---------
Net Charge-offs (Recoveries) (111,072) (55,018) 167,983 111,236
========= ======== ========= =========
TEMECULA VALLEY BANCORP INC.
FINANCIAL DATA
SEPTEMBER 2005
(UNAUDITED)
(all amounts in whole dollars except share and per share information)
Sept 30, Sept 30, Increase Increase
2005 2004 (Decrease) (Decrease)
------------ ------------ ------------ ----------
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
STOCKHOLDERS'
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%
Stockholders'
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 charge-offs
(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
----------------------------------
Sept 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 nonperforming assets 9,140,266 (5,851,489) 3,288,777
=========== =========== ==========
Sept 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 nonperforming assets 10,171,629 (7,554,634) 2,616,995
=========== =========== ==========
NET LOAN CHARGE-OFFS
- ---------------------------------
3 Mos. 3 Mos. 9 Mos. 9 Mos.
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2005 2004 2005 2004
-------- -------- --------- --------
Charge-offs 25,709 328,656 430,534 649,737
Recoveries (80,727) (1,688) (319,298) (8,641)
-------- -------- --------- --------
Net Charge-offs (Recoveries) (55,018) 326,968 111,236 641,096
======== ======== ========= ========
CONTACT: Temecula Valley Bank
Stephen H. Wacknitz, 951-694-9940