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Net Loss Equals $3.6M at Temecula Valley Bancorp

Temecula Valley Bancorp, a regional lender with $1.5 billion in assets and 11 offices, reported Oct. 30 it had a net loss of $3.6 million for the third quarter, compared to a net profit of $2.6 million for the third quarter of 2007.

For the nine months, TVB said it had a net loss of $4.2 million compared to a net profit of $12 million.

CEO Steve Wacknitz said during the past three quarters the bank put $15 million, including about half that amount in the third quarter, into its loan loss provisions to cover actual and potential losses from defaulted loans.

At Sept. 30, TVB classified $96 million or 6.35 percent of its total assets as nonperforming, a term used for loans that are delinquent more than 90 days and not paying principal or interest, and foreclosed real estate.

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Subtracting loans made through the Small Business Administration, which carry guarantees on the bulk of the principal, the bank’s problem assets were nearly $85 million, or 5.6 percent of total assets.

The problem totals of $96 million were triple the $32 million in problem assets the bank reported for September 2007.

Capital levels remained high with leverage capital ratio at 9.09 percent, above the 5 percent minimum ratio to be considered “well capitalized.” For the prior year’s third quarter, it had 10.6 percent leverage ratio.

Wacknitz said 92 percent of the bank’s loans are secured by real estate underwritten at relatively low loan-to-value ratios, on average 64 percent.

TVB, the eighth largest SBA lender in the nation ranked by dollars, holds about a quarter of its loans in this category. The bank said it has shifted from construction and land development loans to owner-occupied commercial real estate lending.

Total loans over the year grew 10 percent to $1.36 billion, while total assets grew 15 percent to $1.5 billion, compared to $1.3 billion on Sept. 30, 2007. That made TVB the sixth largest locally based bank in the county.

Wacknitz said he continues to be optimistic about the bank’s ability to weather the current economic cycle and regain profitability. TVB is also considering seeking new capital through the Treasury Department’s capital purchase program.

, Mike Allen

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