Item 1.02 - Termination of Material Definitive Agreement.

Due to strategic business decisions, David Bartram, Senior Executive Vice President/President of the SBA Division, and Temecula Valley Bank ("Bank"), the principal subsidiary of Temecula Valley Bancorp Inc., have agreed mutually to terminate Mr. Bartram's employment agreement as well as his employment with the Bank. Mr. Bartram has agreed to stay with the Bank until the earlier to occur of May 31, 2009 or the date by which he becomes employed elsewhere. In exchange, Mr. Bartram has agreed to forego any severance amounts he might have otherwise been entitled to receive under the terms of his employment agreement (up to $390,000).

The information filed in the exhibit to this report is being furnished, not filed, pursuant Section 18 of the Securities Exchange Act of 1934, as amended. Accordingly, Exhibit 99.1 of this report will not be incorporated by reference into any of our filings, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in the exhibit to this report are not intended to, and do not, constitute a determination or admission by the Company that such information is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

Item 9.01 - Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is filed with this Form 8-K:

Exhibit 99.1: Press Release dated January 7, 2009