Howe barnes hoefer arnett 13 th annual bank conference august 19 2008
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Howe Barnes Hoefer & Arnett 13 th Annual Bank Conference August 19, 2008 Safe Harbor Statement

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Howe barnes hoefer arnett 13 th annual bank conference august 19 2008 l.jpg

Howe Barnes Hoefer & Arnett

13th Annual Bank Conference

August 19, 2008


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Safe Harbor Statement

Certain statements contained in this presentation, including, without limitation, statements containing the words “believes”, “anticipates”, “intends”, and “expects”, and words of similar import, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Temecula Valley Bancorp (“the Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following; general economic and business conditions in those areas in which the Company operates, demographic changes, competition, fluctuations in interest rates, changes in business strategy or development plans, changes in governmental regulation, credit quality, the availability of capital to fund the expansion of the Company’s business, and other factors referenced in this presentation.

The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.


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TMCV Investment Highlights

  • Experienced management team

    • Expertise in California market, SBA lending and real estate

    • Hired 13 experienced SBA Business Development Officers (BDOs)

    • One of top SBA Lenders in the nation

  • Diversified by geography and type

  • Managing risk aggressively

  • Tightened credit standards

  • Attractive valuation

    • 0.67% of Tangible Book Value

    • 14.0x trailing 12 months EPS

    • 2.29% dividend yield


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TMCV Franchise

Community Banking

  • Consumer, small- & mid-sized commercial loans

  • 11 branches in San Diego, Riverside and San Bernardino Counties

    SBA Lending

  • 26 SBA Business Development Officers

    California Washington

    Oregon Nevada

    Texas Florida

    Arizona

    Primarily in non-judicial foreclosure states.


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Managing Risk Aggressively

  • Detailed loan review

    • Frequent appraisal updates

    • Third party and regulatory reviews

  • Further diversifying portfolio

    • C&D down to 46.4% from 50.4% LTM

    • Moratorium on new spec construction, land & land development

    • SBA loans up to 24.4% from 22.6% LTM

  • Raising equity requirements

  • Conservative Loan-to-Values

    • 2Q08 Average LTV 70% from 68% in 2Q07


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Widely Diversified

Loan Portfolio by Type

$1.33B

Loan Portfolio

at June 30, 2008

  • 92% 1st Trust Deed Real Estate Secured, avg. LTV 70%

  • Shifting to multi-purpose commercial owner-occupied SBA lending

  • Expanding SBA 7(a) lending

  • Average loan size down to $358 thousand

  • Conservative LTV



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Geographic Distribution of Loans

  • Top 3 Other States

  • Texas 4.3%

  • Oregon 2.2%

  • Florida 1.1%

  • Balance of other states 21.4% 29.0%


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Non Performing Assets

  • Non-accrual $60.7

  • 90 day past due $ 0

  • OREO $13.7

  • SBA guarantees ($10.5)

  • NPA (net) $63.9

  • Net NPA / Total Assets 4.37%

  • Reserves (ALLL) $19.2

  • ALLL/Loans 1.45%


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Net Non-Performing Loans

NPLs by Geography

NPLs by Type



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Net Charge-Offs/Average Loans

$8.3 Million in Total Net Losses since 1996


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Diversifying Loan Mix

Loans by Category

  • Loan growth from SBA originations

    • Retain more SBA loans in portfolio

    • Increased originations

    • Higher gains on sale

    • Adding additional BDOs and hired new head of SBA Division

  • Moratorium on Spec C&D, land & land development loans

  • C&I growing with opening of Ontario and Carlsbad offices

(millions)


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SBA Lending Initiatives

  • Hired David Bartram

    • Former president of U.S. Bank’s SBA Division

    • Current Chairman of National Association of Government Guaranteed Lenders

    • 27 years of SBA Experience

  • Hired leading SBA team in 2008

  • Hired 13 new Business Development Officers YTD for a total 26 BDOs

SBA Originations (Retail)


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SBA Lending: A Growth Opportunity

  • 26 SBA lenders in 7 States

  • Ranked in the top 5 largest SBA 504 Lenders (9/07)

  • Ranked #1 B&I Lender (9/07)

  • Ranked 24th largest SBA 7(a) Lender (9/07)

  • Ranked 15th largest SBA 7(a) Lender (9mo. ended 6/30/08)

  • Total SBA Loans, including construction:

    • $481 million, or 39% of total loans

      • California

        • $142 million, or 30% of total SBA loans

      • The next three largest states account for 17% of SBA loans

        • Texas, $57 million

        • Oregon, $29 million

        • Florida, $15 million


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SBA Lending By Type

  • SBA (7a) Loans: $286 million

    • Retain unguaranteed portions

    • Sell guaranteed portions

    • Avg. LTV is 75.2%

    • All require personal guaranties

  • SBA 504 Loans: $195 million

    • $122 million in construction loans

    • $ 73 million in CRE loans

    • TMCV has first lien position and average LTV 55%

  • USDA B&I Loans: $20 million

    • Federal guarantees up to 80%

    • Average LTV 80%


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Strong Capital Levels

Total Leverage Ratio 9.96%

Tier 1 Risk-based Capital 9.22%

Total Risk Based Capital 11.80%


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Attractive Valuation

  • Recent Price $7.00

  • Market Cap $70 M

  • Tangible Book Value /Share $10.49

  • Price / TBV 0.67x

  • EPS (TTM) $0.50

  • P/E $14.0x

  • Dividend Yield 2.29%


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