NARBERTH, PA--(Marketwire - July 19, 2007) - Royal Bank America President/CEO Joseph P.
Campbell announced that the Board of Directors for the Bank's holding
company, Royal Bancshares of Pennsylvania, Inc. (
NASDAQ:
RBPAA), declared
its 49th consecutive quarterly cash dividend on July 18, 2007. This
dividend will be twenty-eight and seventy-five hundredths cents ($.2875)
per share for holders of Class A common stock and thirty-three and six
hundred twenty-five ten thousandths cents ($.330625) per share for holders
of Class B common stock of Royal Bancshares of Pennsylvania, Inc. The
record date is August 1, 2007, and the payment date is August 15, 2007.
Net income for the three months ended June 30, 2007 was $4.3 million or
$0.32 basic and diluted earnings per share, compared to $4.6 million or
$0.34 basic and diluted earnings per share for the same period in 2006.
The $4.3 million earned in the second quarter of 2007 outpaced the first
quarter 2007 earnings of $3.6 million.
The reduction in earnings experienced during the second quarter of 2007,
compared to the second quarter of 2006, was primarily the result of the
higher funding costs experienced in 2007 and an increase in non-accruing
loans. Non-accruing loans increased from $6.9 million at June 30, 2006 to
$29.1 million at June 30, 2007. The $22.2 million increase in non-accruing
loans is the result of the addition of 3 construction loans and 2 mezzanine
construction loans during the first half of 2007. One loan in the amount
of $4.8 million is under an agreement of sale and is expected to payoff
during the third quarter of 2007. Management is closely monitoring these
loans and believes they are adequately collateralized.
For the second quarter of 2007, interest income was $23.1 million compared
to $22.7 million for the same quarter in 2006, an increase of $380
thousand. This increase is due to the higher level of earning assets
during the second quarter of 2007, partially offset by the reduction in
interest income associated with the rise in non-accruing loans. The 2007
year-to-date interest income of $45.0 million was $932 thousand or 2.1%
higher than the 2006 year-to-date interest income.
Interest expense increased $1.1 million, or 9.2% to $12.7 million for the
quarter ended June 30, 2007, compared to the same period in 2006. The
increase in interest expense was due to the growth in the average balance
of deposits and the higher funding costs experienced during 2007, compared
to 2006. Total average deposits increased $153.5 million, or 20.7% to
$896.8 million in the second quarter of 2007, compared to $743.3 for the
second quarter of 2006. The growth was due to a $195.8 million increase in
average certificates of deposit, partially offset by a reduction in money
market deposits. The growth in certificates of deposit was partially
offset by a $144.3 million reduction in average Federal Home Loan Bank
advances during this period. The 2007 year to date interest expense of
$24.7 million was $3.0 million, or 13.9% higher than the $21.7 year to date
2006 interest expense.
The second quarter net interest income of $10.4 million was $686 thousand,
or 6.2% less than the second quarter of 2006. Second quarter 2007 net
interest margin was 3.56% as compared to the 3.99% recorded in the second
quarter of 2006, but was higher than the first quarter of 2007 net interest
margin of 3.47%. The year to date 2007 net interest margin of 3.51% was
58 basis points below the 4.09% net interest margin recorded in the same
period in 2006.
The non-interest income of $2.9 million for the second quarter of 2007 was
even with the second quarter of 2006. The year to date 2007 non-interest
income of $5.2 million was $669 thousand less than the year to date 2006
non-interest income of $5.9 million, primarily as a result of less gains on
the sale of other real estate. Non-interest expense grew 7.3% in the
second quarter of 2007 and the year to date non-interest expense increased
8.4% from the same period in 2006. This increase was the result of both
the opening of a new Royal Asian Bank branch in the first quarter of 2007
and the addition of two specialty lending subsidiaries, Royal Bank America
Asset Based Lending and RBA Capital during the second half of 2006.
The 2007 second quarter provision for loan losses of $159 thousand was less
than the $963 thousand provision recorded in the second quarter of 2006.
The higher provision for loan losses during the second quarter of 2006 was
the result of a $43.8 million increase in loans during the quarter,
compared to a slight decrease in loans during the second quarter of 2007.
Included in the reserve calculations are mezzanine loans, which generally
provide higher yields but which management has determined to have a higher
level of risk compared to the remainder of the loan portfolio.
Consolidated total assets ended June 30, 2007 were $1.33 billion, compared
to $1.36 billion at June 30, 2006. This reduction of assets was the result
of a $6.6 million reduction in loans and a $59.3 million decrease in
investment securities, partially offset by higher cash balances. The
three-month period ended June 30, 2007 return on average assets and return
on average equity were 1.28% and 10.49%, respectively. The year to date
June 30, 2007 return on average assets and return on average equity were
1.19% and 9.75%, respectively.
About Royal Bancshares of Pennsylvania, Inc.
Royal Bancshares of Pennsylvania, Inc., headquartered in Narberth,
Pennsylvania, operates seventeen full-service branch offices throughout
southeastern Pennsylvania and New Jersey under the name Royal Bank America
and six locations in metro-Philadelphia, northern New Jersey and New York
under the name Royal Asian Bank. Together, Royal Bank America and Royal
Asian Bank, along with Royal's other affiliates, offer a wide variety of
products and services, including commercial real estate loans, asset based
lending, structured financing, equipment leasing, equity/mezzanine lending,
high-yielding CDs & MMAs and Internet Banking solutions at
www.royalbankamerica.com and
www.royalasianbank.com.
The foregoing material is unaudited and may contain forward-looking
statements. We caution that such statements may be subject to a number of
uncertainties, and actual results could differ materially; therefore,
readers should not place undue reliance on any forward-looking statements.
Royal Bancshares of Pennsylvania, Inc. does not undertake, and specifically
disclaims, any obligation to publicly release the results of any revisions
that may be made to any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after
the date of such statements.
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except 2007 2006 2007 2006
for earnings (unaudited) (unaudited) (unaudited) (unaudited)
per shares) ----------- ----------- ----------- -----------
Interest Income $ 23,068 $ 22,688 $ 45,033 $ 44,101
Interest Expense 12,695 11,629 24,724 21,708
----------- ----------- ----------- -----------
Net Interest Income 10,373 11,059 20,309 22,393
Provision for Loan
Losses 159 963 371 1,298
----------- ----------- ----------- -----------
Net Interest Income
after Provision 10,214 10,096 19,938 21,095
Non-Interest Income 2,906 2,900 5,229 5,898
Non-Interest Expense 6,876 6,408 13,658 12,596
----------- ----------- ----------- -----------
Income before Taxes 6,244 6,588 11,509 14,397
Income Taxes 1,961 2,002 3,601 4,465
----------- ----------- ----------- -----------
Net Income $ 4,283 $ 4,586 $ 7,908 $ 9,932
=========== =========== =========== ===========
Basic Earnings Per
Share $ 0.32 $ 0.34 $ 0.59 $ 0.74
Diluted Earnings Per
Share $ 0.32 $ 0.34 $ 0.59 $ 0.74
Selected Ratios:
Return on Average
Assets 1.28% 1.38% 1.19% 1.52%
Return on Average
Equity 10.49% 11.82% 9.75% 12.85%
Average Equity to
Assets 12.22% 11.67% 12.23% 11.85%
Book Value Per Share $ 12.18 $ 11.60
CONDENSED BLANCE SHEET
(in thousands)
June 30, Dec. 31, June 30,
2007 2006 2006
(unaudited) (unaudited)
----------- ----------- -----------
Cash and Cash
Equivalents $ 81,974 $ 82,436 $ 23,269
Investment Securities 522,361 568,742 581,702
Loans Held for Sale - 1,959 1,619
Loans & Leases (net) 617,427 589,545 624,306
Premises and Equiment
(net) 43,251 50,280 62,697
Accrued Interest
Receivable 16,972 16,494 15,511
Other Assets 48,995 46,855 50,105
----------- ----------- -----------
Total Assets $ 1,330,980 $ 1,356,311 $ 1,359,209
=========== =========== ===========
Deposits $ 891,615 $ 859,457 $ 758,445
Borrowings 215,804 275,429 398,153
Other Liabilities 30,624 29,247 18,755
Subordinated Debentures 25,774 25,774 25,774
Minority Interest 3,442 3,150 2,164
Shareholders' Equity 163,721 163,254 155,918
----------- ----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,330,980 $ 1,356,311 $ 1,359,209
=========== =========== ===========
Non-accruing Loans and
Other Real Estate
(in thousands) June 30, Dec. 31, June 30,
2007 2006 2006
----------- ----------- -----------
Non-accruing loans $ 29,089 $ 6,560 $ 6,912
Other real estate owned 971 924 1,533
----------- ----------- -----------
Total non-performing
assets $ 30,060 $ 7,484 $ 8,445
=========== =========== ===========
Non-performing assets to
total assets 2.26% 0.55% 0.62%
Non-performing loans to
total loans 4.62% 1.09% 1.09%
Allowance for loan loss
to non-accruing loans 40.36% 174.62% 165.89%
The above condensed financial information includes consolidation of an
Equity Real Estate Investment, owned by Royal Bancshares of
Pennsylvania, Inc., which are required as a result of Fin 46(r) "Variable
Interest Entities."
Contact Information: For additional information:
Marc Sanders
Director of Marketing
610-668-4700 x269