Exhibit 10.37


                  Bonus Pool Arrangement--Revised and Restated

              Temecula Valley Bancorp Inc. ("Bancorp") previously reported on
              February 7, 2006 by Form 8-K that it earmarked approximately 10%
              of its pre tax, pre bonus net income,, payable by its principal
              subsidiary, Temecula Valley Bank (`Bank"), to pay annual incentive
              bonuses to certain officers of the Bank. This Exhibit restates and
              amends the prior Exhibit10.35 to name three additional executive
              officers that are eligible and may participate in the bonus pool.

              Within the group entitled to participate in pool are the executive
              officers designated below as well as other officers of the Bank.
              The bonus paid to some officers is discretionary and for others,
              the amount is fixed in the Employment Agreement of the involved
              individual.

                  For the year ended December 31, 2005, pursuant to the
                  Employment Agreement of Stephen H. Wacknitz, CEO, President
                  and Chairman of the Bank, he is entitled to receive 6% of the
                  pre tax, pre bonus net income of the Company. For the year
                  ended December 31, 2006, pursuant to his Employment Agreement,
                  he is entitled to receive 5% of the pre tax, pre bonus net
                  income of the Company.

                  Pursuant to the Employment Agreement of William McGaughey,
                  Senior Executive Vice President/Director of Finance and SBA,
                  he is entitled to receive the greater of $100,000 or 1.5% of
                  the pre-tax net income of the Company, payable by the Bank.

                  Pursuant to the Employment Agreement of Frank Basirico, Senior
                  Executive Vice President/ Chief Administrative Officer, he is
                  entitled to receive 1% of the pre-tax, post bonus net income
                  of the Company, payable by the Bank.

                  Upon the recommendation of the Executive Compensation
                  Committee and approval by the Board of Directors, the
                  following executives may receive an annual incentive bonus
                  based upon performance:

                  a.       James Andrews, Executive Vice President/Real Estate
                           Industries Group (will not participate in the pool in
                           2006 as his bonus will be 2.5% of pre-tax profits of
                           his department)

                  b.       Donald A. Pitcher, Executive Vice President/Chief
                           Financial Officer

                  c.       Martin E. Plourd, Executive Vice President/Chief
                           Operating Officer

                  d.       Donald L. Schempp, Executive Vice President/North San
                           Diego County Regional Manager

                  e.       Thomas Shepherd, Senior Executive Vice
                           President/Chief Credit Officer

                  f.       Scott J. Word, Executive Vice President/ Senior
                           Lending Officer