EXHIBIT 99.1
Temecula Valley Bancorp Announces Second Quarter 2007 Earnings
TEMECULA, Calif.--(BUSINESS WIRE)--July 17, 2007--Temecula Valley
Bancorp, Inc. (NASDAQ:TMCV) today announced second quarter 2007 net
income of $5.25 million, a 15.9 percent increase from the $4.53
million reported for the second quarter of 2006. Diluted earnings per
share for the second quarter were $0.47, unchanged from the 2006
second quarter, and $0.09 above the first quarter of 2007. For the six
months year-to-date, net income was $9.4 million, up 10.6 percent from
the $8.5 million reported for the 2006 six-month period; diluted
earnings per share were $0.85 compared with $0.89 for the prior six
months, a decline of 5.6 percent. Compared with the year-earlier
quarter, second quarter 2007 results reflect strong loan growth and a
narrower net interest margin. Compared with the first quarter of this
year, results reflect improved profitability from loan sales, a
stabilizing margin, and lower net loan charge-offs. Per share earnings
were negatively impacted in 2007 by the private placement of 1.4
million common shares in November 2006, which increased average shares
outstanding by 15.3 percent compared to second quarter of 2006, and by
15.9 percent for the six-month period.
Highlights of the quarter include:
-- The sale of $102.5 million of loans including $70 million in
long-term lower-yielding commercial real estate loans,
resulting in a gain of $4.5 million.
-- Improved profitability, as reflected in the net interest
margin stabilizing at 5.51 percent, and a 25 basis point
increase to 1.59 percent, in the annualized return on average
assets, compared to the previous quarter.
-- A return to more normalized asset quality, as reflected in the
$291,000 decline in net loan charge-offs, to 0.06 percent of
average loans, compared to first quarter of 2007.
-- The Company declared a first-time quarterly cash dividend of
$0.04 per share.
-- Temecula's board of directors authorized a stock buyback
program to purchase up to $5.5 million of shares of TMCV
common stock; this quarter, 106,900 shares were repurchased at
a cost of $2.1 million.
Chairman of the Board, CEO and President Stephen H. Wacknitz
stated, "This quarter's performance provides a good example of the
strength of our organization, as well as our flexibility in
challenging times. Our balance sheet provides us with multiple
options, enabling us to respond quickly to changes in the industry
environment and local market conditions.
"We concluded that this interest-rate environment, with its
inverted yield curve and increased competition for core deposits, will
be with us for a while," commented Mr. Wacknitz. "So this quarter, we
opted to shift from our traditional growth posture to a more
conservative stance, with a focus on profitability. Loan originations
remain solid and we are seeing good quality loans in every category of
our portfolio. So asset quality remains strong. However, funding costs
have become the major factor impacting our earnings. The sale of $70
million of lower-yielding loans this quarter allowed us to decrease
our reliance on high-cost deposits and therefore, stabilize our net
interest margin."
Returns on average assets and average equity were 1.59 percent and
19.07 percent, respectively, for the quarter ending June 30, 2007,
compared to 1.90 percent and 27.71 percent, respectively, for the
year-ago second quarter; six-month returns on average assets and
equity were 1.47 percent and 17.56 percent, respectively, for the 2007
period compared with 1.86 percent and 27.19 percent for the prior
year.
Income Statement
Total interest income for the second quarter of 2007 was $30.0
million, compared with $22.0 million for the second quarter of 2006,
an increase of 36.4 percent. Net interest income was $17.1 million, up
17.3 percent over the $14.5 million reported for the year-ago quarter.
Growth in net interest income reflects a 44.5 percent increase in
average earnings assets, partially offset by a 128 basis point, or
18.8 percent, decline in net interest margin, from 6.79 percent for
the 2006 quarter, to 5.51 percent for the current quarter. Compared to
first quarter 2007, the margin declined a mere three basis points as
loan growth slowed and funding costs dropped significantly. Mr.
Wacknitz commented, "Our book is well-matched between tenor of loans
and deposits, which gives us great flexibility to manage our net
interest margin."
Non-interest income for the second quarter of 2007 was $6.1
million, a decline of $358,000, or 5.9 percent, from the year-ago
quarter, and a $2.2 million improvement from the first quarter of this
year. Over the past twelve months, SBA servicing assets decreased by
$9.0 million, to $16.9 million, due to adjustments to fair value
according to FAS 156. The sale of $102.5 million of loans served the
dual purpose of generating a $4.5 million gain on sale that more than
offset the $1.1 million swing in SBA servicing income caused by
accelerated prepayments, and it enabled Temecula to lower the level of
high-cost borrowings. While Temecula is consistently a net seller of
loans, second quarter sales were distinguished by their magnitude. By
comparison with the current quarter, Temecula sold $51.6 million of
loans the second quarter of 2006, resulting in a $3.8 million gain,
and $40.1 million in the first quarter 2007 for a $2.3 million gain on
sales.
The provision for loan losses was zero for the current quarter,
compared with $1.1 million reported for the year-ago quarter, and
$415,000 for the first quarter of this year. During the second quarter
of 2007, we made a contribution of $485,000 to our reserve for
undisbursed loans. Net charge-offs have been relatively modest since
virtually all of Temecula's non-performing loans are collateralized by
real estate, and over half is guaranteed under various SBA programs.
Second quarter non-interest expense was $14.3 million, an increase
of $2.2 million, or 18.1 percent, over the $12.1 million reported for
the year-ago quarter, and $1.7 million above first quarter 2007.
Salary and benefits expenses accounted for $1.5 million of the linked
quarter increase. They increased due to staffing increases, an accrual
for the ESOP contribution, and increased benefit expenses. For the
quarter ending June 30, 2007, the efficiency ratio increased to 61.8
percent from 57.4 percent in the second quarter of 2006.
Balance Sheet
Total assets were $1.31 billion at June 30, 2007, up $280.0
million or 27.2 percent from the $1.03 billion reported at June 30,
2006, and a $70.8 million increase since year-end 2006. Loans
increased $227.0 million to $1.15 billion, or 24.5 percent
year-over-year, but grew only $8.8 million over the past six months,
with all of the growth in the first quarter of 2007; second quarter
loans, in fact, decreased by $28.3 million compared with the previous
quarter, primarily due to the sale of $102.5 million in loans.
Temecula remains solidly entrenched in real estate lending, with
approximately 94.5 percent of loans collateralized by real property.
Construction lending is the bank's major focus, accounting for
approximately 50 percent of its loan portfolio. According to Mr.
Wacknitz, "We always have been selective in terms of our construction
projects, and our borrowers are becoming more conservative as well, so
we are seeing a slowdown in this sector." Construction outstandings
grew $175 million year-over-year; virtually all of this growth,
however, occurred in 2006. The $70 million loan sale impacted the
'Real Estate Other' category (primarily commercial real estate and SBA
504 loans); this category currently accounts for $250.2 million, or
21.7 percent of total loans, a decline of $42.6 million from its
December 31, 2006 high point. SBA 7a loans, by comparison, are
flourishing; year-over-year, they have nearly doubled to $260.2
million from $93.3 million a year ago. The current quarter was $24.4
million higher than the first.
The loans held in portfolio are diversified geographically and by
type of loan. Approximately 17.2 percent of loans were originated
outside the state of California through various SBA programs; these
are all commercial in nature, divided between non-construction CRE
($93.1 million) and commercial construction ($64.8 million). Of the
California portfolio, residential construction loans account for 46.4
percent, commercial construction loans account for 15.4 percent and
CRE loans account for 21.9 percent.
"Through our SBA programs," Mr. Wacknitz explained, "we have
highly experienced lenders in eight states originating SBA and similar
loans. We have 28 lenders throughout the state of California focused
on construction lending as well as CRE. And most importantly, we have
four people in our appraisal department who are responsible for
ordering and reviewing the appraisals independent of the loan
origination officers. We average a loan-to-value ratio of 68 percent
for our entire real estate-secured portfolio. Because of these
factors, our asset quality has been excellent. Yes, we are seeing some
of our borrowers under pressure, and yes, non-performing assets have
increased somewhat, but net charge-offs remain extremely low."
Total non-performing assets were $27.4 million this quarter,
supported by government guarantees of approximately $15.2 million,
thereby reducing potential loss exposure to $12.2 million, or 0.93
percent of total assets. Both gross and net non-performing assets have
been increasing quarterly over the past twelve months, from a gross
level of $9.0 million (0.87 percent of assets) for the year-ago
quarter, to $24.5 million (1.87 percent) for the linked quarter. After
guarantees, exposures were reduced to $1.7 million (0.17 percent of
assets) for the year-ago quarter, and $10.4 million (0.79 percent) for
the linked quarter. Nonetheless, net loan charge-offs remained
extremely low throughout these five quarters; except for a clean-up in
the first quarter of this year, net charge-offs ranged form 0.00
percent to 0.06 percent for the current quarter. By comparison, the
allowance for loan losses was 1.07 percent of total loans including
loans held for sale at June 30, 2007. The allowance for loan losses
was 1.28 percent of total loans excluding loans held for sale at June
30, 2007.
Deposits at June 30, 2007 were $1.15 billion, an increase of
$227.9 million, or 24.7 percent, from $921.9 million at June 30, 2006.
Again, the majority of this growth occurred in 2006; second quarter
2007 deposit balances declined by $2.1 million from the first quarter
of this year. Core deposits, excluding time deposits greater than
$100,000, were $729.9 million at June 30, 2007; they accounted for
63.5 percent of total deposits compared with $744.7 million, or 64.6
percent, for the linked quarter. The cost of interest-bearing deposits
was relatively stable between the current and the previous quarters at
approximately 4.78% to 4.75%. "Slowing loan growth has assisted in
stabilizing the cost of interest-bearing deposits," commented Mr.
Wacknitz.
Shareholder equity increased 65.2 percent from $67.9 million at
June 30, 2006 to $112.2 million at June 30, 2007; over half the growth
was attributable to the $25.1 million private placement completed in
November 2006, and the remainder to the exercise of stock options and
the contribution from net income. At June 30, 2007, the Company had
10,662,772 shares outstanding, net of the 106,900 shares repurchased
this quarter under the newly-authorized stock buyback program. Capital
ratios remain strong at June 30, 2007, with the Tier 1 leverage ratio
at 10.93 percent, the Tier 1 risk-based capital ratio at 10.58
percent, and the total risk-based capital ratio at 11.51 percent, all
above the minimum to qualify as "well capitalized."
"We have demonstrated the solidity of our business model and our
ability to respond to market conditions. We turned on a dime this
quarter, because we underwrite the majority of our commercial real
estate loans to provide us with balance sheet flexibility. While we
are not yet back to historical levels of performance, we have
definitely made a lot of progress this past quarter. Our confidence in
our future performance is reflected in the quarterly cash dividend we
declared for the first time this past quarter, as well as the stock
repurchases we continue to make," concluded Mr. Wacknitz.
About the Company
Temecula Valley Bank, established in 1996, operates ten
full-service offices in Temecula, Murrieta, Corona, Fallbrook,
Escondido, Rancho Bernardo, El Cajon, Carlsbad, Solana Beach and
Ontario. The Bank also operates a number of regional real estate loan
production centers in California. As a nationally authorized SBA
Preferred Lender, the Bank has multiple SBA loan production offices
across the United States and has funded over $1.3 billion in SBA loans
in 36 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.
Forward-looking Statements
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 the Securities and Exchange
Commission by Temecula Valley Bancorp Inc. The Corporation undertakes
no obligation to update forward-looking statements, whether as a
result of new information, future events or otherwise.
TEMECULA VALLEY BANCORP INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(in thousands except share and per share data)
June 30, June 30, % Dec. 31, %
2007 2006 Change 2006 Change
----------- ----------- ------ ----------- ------
ASSETS
Cash and due from
banks $ 13,644 $ 15,063 (9%) $ 15,190 (10%)
Interest-bearing
deposits in
financial
institutions 1,000 99 910% 99 910%
Federal funds sold 76,750 27,400 180% 18,180 322%
Securities 1,012 0 0% 1,019 (1%)
Loans
Commercial 57,019 41,623 37% 59,550 (4%)
Real Estate-
Construction 580,987 405,390 43% 568,227 2%
Real Estate
(Including HFS) 250,198 269,578 (7%) 292,827 (15%)
SBA 260,177 93,281 179% 218,408 19%
Consumer and other 3,134 114,632 (97%) 3,681 (15%)
----------- ----------- -----------
Total Gross Loans 1,151,515 924,504 25% 1,142,693 1%
Less allowance for
loan losses (12,268) (10,170) 21% (12,522) (2%)
----------- ----------- -----------
Total Loans, net 1,139,247 914,334 25% 1,130,171 1%
Federal Reserve &
Home Loan Bank
stock, at cost 2,833 3,189 (11%) 1,996 42%
Bank premises and
equipment, net 5,400 5,068 7% 5,492 (2%)
Other real estate
owned, net 722 728 (1%) 1,255 (42%)
Cash surrender value
life insurance 27,505 21,595 27% 24,036 14%
SBA-loan servicing
asset 7,111 8,570 (17%) 8,288 (14%)
SBA-loan I/O strip
receivable 9,775 17,311 (44%) 13,215 (26%)
Accrued interest 6,466 3,890 66% 6,155 5%
Other Assets 17,500 10,980 59% 13,093 34%
----------- ----------- -----------
Total Assets $1,308,965 $1,028,227 27% $1,238,189 6%
=========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits
Non-interest Bearing
Deposits 144,683 158,858 (9%) 144,525 0%
Money Market & NOW 151,893 106,873 42% 130,357 17%
Savings 29,487 34,672 (15%) 29,781 (1%)
Time Deposits 823,772 621,539 33% 776,838 6%
----------- ----------- -----------
Total deposits 1,149,835 921,942 25% 1,081,501 6%
Junior subordinated
debt securities 34,023 28,868 18% 41,240 (18%)
Accrued interest 2,027 1,263 60% 2,094 (3%)
Dividend Payable 427 0 0% 0 0%
Other liabilities 10,465 8,222 27% 10,091 4%
----------- ----------- -----------
Total liabilities 1,196,777 960,295 25% 1,134,926 5%
Stockholders' equity 112,188 67,932 65% 103,263 9%
----------- ----------- -----------
Total liabilities
and Stockholders'
equity $1,308,965 $1,028,227 27% $1,238,189 6%
=========== =========== ===========
SELECTED BALANCE
SHEET DATA
Book value per
share, end of
period 10.52 7.43 9.75
Allowance for loan
losses as a % of
total loans 1.07% 1.10% 1.10%
Gross non-performing
assets as a % of
total assets 2.09% 0.87% 1.66%
Net non-performing
assets as a % of
total assets 0.93% 0.17% 0.77%
Net charge-offs
(annualized) as a %
of total loans 0.06% 0.06% 0.01%
PAST DUE AND NON-ACCRUAL LOANS
------------------------------------- -------------------------------
Gross Government Net
June 30, 2007 Balance Guaranty Balance
------------------------------------- -------------------------------
30-89 days past due 11,471 (405) 11,066
========== ========== =========
90+ days past due and accruing 0 0 0
Non-accrual 26,630 (14,611) 12,019
Other real estate owned (REO) 722 (542) 180
---------- ---------- ---------
Total non-performing assets 27,352 (15,153) 12,199
========== ========== =========
December 31, 2006
-------------------------------------
30-89 days past due 3,284 (1,737) 1,547
========== ========== =========
90+ days past due and accruing 140 0 140
Non-accrual 19,124 (10,335) 8,789
Other real estate owned (REO) 1,255 (638) 617
---------- ---------- ---------
Total non-performing assets 20,519 (10,973) 9,546
========== ========== =========
June 30, 2006
-------------------------------------
30-89 days past due 2,044 (1,181) 863
========== ========== =========
90+ days past due and accruing 0 0 0
Non-accrual 8,257 (6,832) 1,425
Other real estate owned (REO) 728 (409) 319
---------- ---------- ---------
Total non-performing assets 8,985 (7,241) 1,744
========== ========== =========
TEMECULA VALLEY BANCORP INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands except share and per share data)
3 Mos. Ended June 30, 6 Mos. Ended June 30,
------------------------ ------------------------
2007 2006 2007 2006
------------ ----------- ------------ -----------
INTEREST INCOME
Interest income and
fees on loans $ 29,487 $ 21,762 $ 57,565 $ 41,060
Other Interest
income 417 150 698 272
------------ ----------- ------------ -----------
Total Interest
income 29,904 21,912 58,263 41,332
INTEREST EXPENSE
Interest on deposits 12,071 6,658 23,347 12,118
Interest on junior
subordinated debt
and other
borrowings 779 717 1,614 1,309
------------ ----------- ------------ -----------
Total Interest
expense 12,850 7,375 24,961 13,427
------------ ----------- ------------ -----------
Net interest income 17,054 14,537 33,302 27,905
Provision for loan
losses 0 1,096 415 1,410
------------ ----------- ------------ -----------
Net interest income
after provision for
loan losses 17,054 13,441 32,887 26,495
NON-INTEREST INCOME
Service charges and
fees 151 162 300 315
Gain on sale of
loans, fixed assets
and OREO 4,454 3,966 6,737 6,936
SBA Net Servicing
income (855) 209 (1,710) 624
Loan-related income 559 679 1,017 1,200
Other income 1,808 1,459 3,711 2,341
------------ ----------- ------------ -----------
Total Non-Interest
income 6,117 6,475 10,055 11,416
NON-INTEREST EXPENSE
Salaries and
employee benefits 9,646 8,122 18,283 15,863
Occupancy and
equipment 1,273 1,172 2,537 2,291
Marketing and
business promotion 257 259 601 484
Office expense 705 576 1,363 1,184
Loan-related expense 493 766 1,115 1,228
Other expense 1,943 1,158 3,081 2,081
------------ ----------- ------------ -----------
Total Non-Interest
income 14,317 12,053 26,980 23,131
------------ ----------- ------------ -----------
Earnings before
income taxes 8,854 7,863 15,962 14,780
Income taxes 3,603 3,333 6,532 6,270
------------ ----------- ------------ -----------
Net earnings $ 5,251 $ 4,530 $ 9,430 $ 8,510
============ =========== ============ ===========
OTHER SELECTED
FINANCIAL DATA
Actual common shares
outstanding at end
of period 10,662,772 9,140,755 10,662,772 9,140,755
Average common
shares outstanding 10,661,179 9,025,994 10,631,627 8,990,537
Average common
shares &
equivalents
outstanding 11,072,471 9,606,151 11,063,223 9,546,876
Basic earnings per
share 0.49 0.50 0.89 0.95
Diluted earnings per
share 0.47 0.47 0.85 0.89
Return on average
assets (annualized) 1.59% 1.90% 1.47% 1.86%
Return on average
equity (annualized) 19.07% 27.71% 17.56% 27.19%
Investment Yield 5.24% 4.78% 5.23% 4.64%
Loan Yield 9.79% 10.31% 9.77% 10.17%
Cost of Interest-
bearing Deposits 4.78% 3.89% 4.77% 3.72%
Cost of Borrowings 7.66% 7.03% 7.91% 6.92%
Loan to deposit
ratio, end of
period 100.15% 105.66% 100.15% 100.28%
Net interest margin 5.51% 6.79% 5.53% 6.81%
Efficiency ratio 61.79% 57.36% 62.23% 58.83%
Tier 1 leverage
capital ratio 10.93% 9.37% 10.93% 9.37%
Tier 1 risk-based
capital ratio 10.58% 8.36% 10.58% 8.36%
Total risk-based
capital ratio 11.51% 9.84% 11.51% 9.84%
NET LOAN CHARGE-OFFS
--------------------
Charge-offs 198 140 678 296
Recoveries (9) (16) (9) (17)
------------ ----------- ------------ -----------
Net Charge-offs
(Recoveries) 189 124 669 279
============ =========== ============ ===========
TEMECULA VALLEY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(dollars in thousands except per share data)
Quarterly
--------------------------
2007
------------------------
2nd Qtr 1st Qtr
------------ -----------
EARNINGS
Net interest income (fully tax-equivalent) $ 17,054 16,250
Provision for loan and lease losses $ 0 415
Non-Interest income $ 6,117 3,938
Non-Interest expense $ 14,317 12,664
Net income $ 5,251 4,179
Basic earnings per share $ 0.49 0.39
Diluted earnings per share $ 0.47 0.38
Average shares outstanding 10,661,179 10,601,748
Average diluted shares outstanding 11,072,471 11,124,945
PERFORMANCE RATIOS
Return on average assets 1.59% 1.34%
Return on average common equity 19.07% 16.04%
Net interest margin (fully tax-equivalent) 5.51% 5.54%
Investment Yield 5.24% 5.23%
Loan Yield 9.79% 9.75%
Cost of Interest-bearing Deposits 4.78% 4.75%
Cost of Borrowings 7.66% 8.14%
Non-interest income/Operating revenue 26.40% 19.51%
Efficiency ratio 61.79% 62.73%
Full-time equivalent employees 318 313
CAPITAL
Loans/Deposits 100.15% 102.43%
Securities/Assets 0.08% 0.08%
Equity to assets 8.57% 8.21%
Regulatory leverage ratio 10.93% 11.27%
Tier 1 capital ratio 10.58% 10.42%
Total risk-based capital ratio 11.51% 11.65%
Book value per share $ 10.52 10.15
Common dividends per share $ 0.04 N/A
ASSET QUALITY
Gross loan charge-offs $ 198 479
Net loan charge-offs (recoveries) $ 190 479
Net loan charge-offs to average loans 0.06% 0.16%
Allowance for loan losses $ 12,268 12,458
Allowance for losses to total loans 1.07% 1.06%
Non-performing loans $ 26,629 23,813
90-Day Delinquencies 0 0
Other real estate owned $ 722 722
Non-performing assets (including OREO) $ 27,352 24,535
Non-performing assets to total assets 2.09% 1.87%
Non-performing Assets, Net of Guarantees
(NOG) $ 12,199 10,420
Non-performing assets NOG to Total Assets 0.93% 0.79%
END OF PERIOD BALANCES
Loans (before allowance) $ 1,151,515 1,179,789
Total earning assets (before allowance) $ 1,230,277 1,236,224
Total assets $ 1,308,965 1,312,448
Non-interest bearing demand $ 144,683 151,293
Money Market and NOW $ 151,893 141,028
Savings $ 29,487 32,012
Time deposits under $100,000 $ 403,827 420,301
Time deposits $100,000 and over $ 419,945 407,219
Total Deposits $ 1,149,835 1,151,853
Shareholders' equity $ 112,188 107,744
Period end common shares outstanding 10,662,772 10,613,659
QUARTERLY AVERAGE BALANCES
Loans (before allowance) $ 1,208,928 1,167,399
Total earning assets (before allowance) $ 1,240,905 1,189,218
Total assets $ 1,323,088 1,266,657
Deposits $ 1,158,276 1,106,127
Shareholders' equity $ 110,424 105,661
Quarterly
-----------------------------------
2006
-----------------------------------
4th Qtr 3rd Qtr 2nd Qtr
------------ ----------- ----------
EARNINGS
Net interest income (fully tax-
equivalent) 16,282 15,593 14,537
Provision for loan and lease
losses 890 1,350 1,096
Non-Interest income 3,695 4,333 6,475
Non-Interest expense 12,256 11,604 12,054
Net income 4,392 4,018 4,530
Basic earnings per share 0.45 0.44 0.50
Diluted earnings per share 0.43 0.41 0.47
Average shares outstanding 9,800,612 9,149,922 9,025,994
Average diluted shares outstanding 10,322,256 9,696,764 9,606,151
PERFORMANCE RATIOS
Return on average assets 1.46% 1.48% 1.90%
Return on average common equity 20.11% 22.72% 27.71%
Net interest margin (fully tax-
equivalent) 5.79% 6.29% 6.79%
Investment Yield 5.22% 5.22% 4.78%
Loan Yield 9.92% 10.30% 10.31%
Cost of Interest-bearing Deposits 4.68% 4.42% 3.89%
Cost of Borrowings 7.84% 8.04% 7.03%
Non-interest income/Operating
revenue 18.50% 21.75% 30.82%
Efficiency ratio 61.35% 58.24% 57.36%
Full-time equivalent employees 312 304 289
CAPITAL
Loans/Deposits 105.66% 104.33% 100.28%
Securities/Assets 0.08% 0.09% 0.00%
Equity to assets 8.34% 6.38% 6.61%
Regulatory leverage ratio 11.42% 8.94% 9.37%
Tier 1 capital ratio 10.49% 7.92% 8.36%
Total risk-based capital ratio 11.90% 10.19% 9.84%
Book value per share 9.75 7.96 7.43
Common dividends per share N/A N/A N/A
ASSET QUALITY
Gross loan charge-offs 25 61 140
Net loan charge-offs (recoveries) (1) (111) 124
Net loan charge-offs to average
loans 0.00% (0.05%) 0.06%
Allowance for loan losses 12,522 11,631 10,170
Allowance for losses to total
loans 1.10% 1.10% 1.10%
Non-performing loans 19,124 11,700 8,257
90-Day Delinquencies 140 0 0
Other real estate owned 1,255 2,131 728
Non-performing assets (including
OREO) 20,519 13,800 8,985
Non-performing assets to total
assets 1.66% 1.21% 0.87%
Non-performing Assets, Net of
Guarantees (NOG) 9,547 3,784 1,744
Non-performing assets NOG to Total
Assets 0.77% 0.33% 0.17%
END OF PERIOD BALANCES
Loans (before allowance) 1,142,693 1,061,515 924,504
Total earning assets (before
allowance) 1,161,991 1,065,964 952,003
Total assets 1,238,189 1,143,971 1,028,227
Non-interest bearing demand 144,525 155,445 158,858
Money Market and NOW 130,357 123,443 106,873
Savings 29,781 30,112 34,672
Time deposits under $100,000 367,029 331,432 298,136
Time deposits $100,000 and over 409,809 377,023 323,403
Total Deposits 1,081,501 1,017,455 921,942
Shareholders' equity 103,263 72,960 67,932
Period end common shares
outstanding 10,586,659 9,169,088 9,140,755
QUARTERLY AVERAGE BALANCES
Loans (before allowance) 1,099,465 957,182 846,206
Total earning assets (before
allowance) 1,116,363 984,203 858,827
Total assets 1,197,032 1,076,472 955,543
Deposits 1,053,338 963,949 839,601
Shareholders' equity 86,650 70,170 65,561
REAL ESTATE SECURED LOANS (Including Held-For-Sale)
- ----------------------------------------------------------------------
6/30/2007 3/31/2007 12/31/2006 9/30/2006 6/30/2006
--------- --------- ---------- --------- ---------
Residential
Construction Loans
- -------------------
10 Owner Occupied
Res Const 1.34% 2.48% 3.31% 4.73% 4.89%
11 High-End Owner
Occupied 8.35% 7.22% 7.92% 7.21% 5.20%
20 Spec Residential
Construction (1-4
units) 12.68% 12.30% 12.40% 12.52% 13.24%
21 High-End Spec
Residential Const
(1-4 units) 20.78% 20.64% 18.96% 18.60% 22.17%
23 High-End
Residential Tract
Construction (over
4 units) 12.15% 11.45% 11.35% 11.24% 10.11%
24 Tract
Construction (over
4 Units) 5.95% 6.34% 7.71% 10.23% 10.85%
25 Multi-Family
Construction 4.65% 3.97% 2.29% 2.03% 1.86%
26 Condominium
Construction 7.70% 7.43% 8.25% 7.50% 8.04%
27 High-End
Condominium
Construction 21.55% 22.08% 21.21% 19.47% 17.62%
28 Condominium
Conversion 4.85% 6.09% 6.60% 6.48% 6.03%
--------- --------- ---------- --------- ---------
Total Residential
Construction Loans 100.00% 100.00% 100.00% 100.00% 100.00%
========= ========= ========== ========= =========
Sub-Total
Residential
Construction Loans 38.41% 35.08% 35.77% 36.91% 36.61%
Commercial
Construction Loans
- -------------------
30 Owner-Occupied
Comm Const 27.44% 24.41% 18.72% 19.79% 20.69%
31 Restaurant/Bar
Construction 0.66% 2.25% 1.84% 1.88% 2.13%
32 Hotel/Motel
Construction 33.43% 30.77% 29.99% 28.52% 27.42%
33 Car Wash
Construction 3.47% 3.95% 5.49% 6.41% 9.76%
34 Gas Station/C
Store Construction 3.46% 2.53% 4.38% 7.91% 8.55%
36 Retail Spec
Construction 1.26% 4.35% 9.32% 7.82% 5.68%
38 Office Spec
Construction 11.26% 12.83% 9.59% 8.20% 6.07%
40 Industrial/
Warehouse Spec
Const 6.58% 8.63% 11.42% 9.32% 13.60%
42 Healthcare
Construction 8.34% 7.21% 4.76% 4.50% 0.73%
44 Miscellaneous
Comm Const 1.69% 0.85% 2.39% 3.08% 2.41%
45 Mini-Storage
Construction 2.41% 2.20% 2.09% 2.58% 2.96%
--------- --------- ---------- --------- ---------
Total Commercial
Construction Loans 100.00% 100.00% 100.00% 100.00% 100.00%
========= ========= ========== ========= =========
Sub-Total
Commercial
Construction Loans 19.80% 21.17% 21.02% 18.03% 16.70%
Non-Construction
Real Estate Loans
- -------------------
59 Multi-Family 1.91% 2.58% 2.39% 2.23% 1.55%
60 Owner-Occupied
Commercial 31.58% 34.23% 31.00% 27.49% 27.26%
61 Restaurant/Bar 3.94% 3.22% 2.56% 2.75% 2.14%
62 Hotel/Motel 19.09% 15.17% 18.19% 22.01% 23.86%
63 Car Wash 4.18% 4.01% 3.69% 3.25% 2.63%
64 Gas Station/C
Store 13.59% 12.13% 11.68% 13.79% 17.11%
66 Retail
Investment 3.35% 3.10% 3.51% 3.53% 3.81%
68 Office
Investment 2.42% 3.66% 3.90% 3.78% 3.78%
70 Industrial/
Warehouse
Investment 11.79% 13.09% 13.76% 11.77% 9.83%
72 Healthcare 3.61% 2.39% 1.68% 2.24% 2.67%
74 Miscellaneous
Commercial 2.31% 4.36% 5.29% 4.77% 2.68%
75 Mini-Storage 2.22% 2.08% 2.36% 2.38% 2.67%
--------- --------- ---------- --------- ---------
Total Non-
Construction Real
Estate Loans 100.00% 100.00% 100.00% 100.00% 100.00%
========= ========= ========== ========= =========
Sub-Total Non-
Construction Real
Estate Loans 28.26% 32.45% 30.30% 32.18% 32.90%
Land Loans
- -------------------
50 Residential Land
Development 28.80% 34.52% 30.59% 33.28% 34.43%
51 Commercial Land
Development 7.84% 4.57% 4.25% 4.77% 6.77%
55 Unimproved Land 63.36% 60.92% 65.17% 61.94% 58.81%
--------- --------- ---------- --------- ---------
Total Land Loans 100.00% 100.00% 100.00% 100.00% 100.00%
========= ========= ========== ========= =========
Sub-Total Land
Loans 13.53% 11.30% 12.90% 12.88% 13.79%
--------- --------- ---------- --------- ---------
Total Real Estate
Secured Loans 100.00% 100.00% 100.00% 100.00% 100.00%
========= ========= ========== ========= =========
CONTACT: Temecula Valley Bank
Stephen H. Wacknitz, 951-694-9940