Summary of TEMECULA VALLEY BANCORP INC

Item 8.01 - Other Events.

The Federal Deposit Insurance Corporation ("FDIC") issued a Supervisory Prompt Corrective Action Directive ("Directive") to Temecula Valley Bank ("Bank"), the banking subsidiary of Temecula Valley Bancorp Inc. ("Company"), dated June 15, 2009. Prior to its issuance, the Bank was subject to all of the Directive's restrictions except that: (1) the recapitalization requirements previously imposed by the Bank's regulators required earlier action and more capital; and (2) the asset growth limitation was previously in the form of plans to be adopted by the Bank to reduce the level of land and construction loans and the level of classified and delinquent loans. Those prior requirements remain in effect. Thus, before its receipt of the Directive, the Bank had addressed or was in the process of addressing each element of the Directive, as more specifically addressed below.

The Directive requires the Bank to take one or more of the following actions to recapitalize the Bank within 30 days, or by July 15, 2009: (1) sell enough voting shares or obligations of the Bank so that the Bank will be "adequately capitalized," as defined under the Federal Deposit Insurance Act ("Act") and the relative FDIC regulations, after the sale; and/or (2) accept an offer to be acquired by a depository institution holding company or combine with another insured depository institution. As announced on June 1, 2009, the Company has entered into a letter of intent with Bancroft Capital, LLC dated May 27, 2009. There is no assurance that the transactions contemplated in the letter of intent will result in a completed transaction or that any other strategy to recapitalize the Bank will be successful.

The Directive states that the FDIC has categorized the Bank as being a "significantly undercapitalized" depository institution, as defined under the Act and FDIC rules and regulations, prohibits the acquisition or roll-over of brokered deposits and restricts the interest rates that the Bank may pay on deposits to prevailing rates in accordance with FDIC regulations. The Bank ceased acquiring brokered deposits and began implementing the applicable rate restrictions in January 2009. In addition, the Directive states that the Bank is not permitted to increase its average total assets or make any capital distributions to the Company or to pay bonuses or increase the compensation of any director or officer of the Bank. As previously disclosed, the Bank embarked upon an asset reduction strategy in December 2008 and has substantially decreased the overall compensation levels at the Bank with most of the executive officers taking a voluntary pay reduction in May 2009; the directors voluntarily ceased taking any form of compensation in January 2009.

For further information about the Directive, see the full text of the Directive, which is attached as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.