NARBERTH, PA--(Marketwire - November 15, 2010) - Royal Bancshares of Pennsylvania, Inc.
(
NASDAQ:
RBPAA) announced its financial results for the third quarter ended
September 30, 2010. The net loss attributable to Royal Bancshares ("Royal")
was $2.8 million for the quarter, or 25 cents per common share, compared to
a net loss of $4.4 million, or 37 cents per common share, in the quarter
ended September 30, 2009.
The improved results for the third quarter were primarily due to a $1.5
million reduction in the provision for loan and lease losses, a $628
thousand reduction in net income attributable to noncontrolling interests,
a reduction of $474 thousand in income tax expense related to the surrender
of bank owned life insurance in 2009 and a $333 thousand increase in net
interest income as a result of a 52 basis point increase in net interest
margin mainly due to lower funding costs. Partially offsetting these
improvements was a $1.7 million increase in impairment of real estate owned
via equity investments and an $830 thousand increase in impairments of
other real estate owned. Excluding these impairments, other operating
expenses decreased $2.0 million.
For the nine months ended September 30, 2010, net loss attributable to
Royal Bancshares was $8.4 million, or 75 cents per common share, compared
to a net loss of $23.2 million or $1.84 per share in the first nine months
of 2009.
The improved results for the nine month period were due to a $9.4 million
reduction in impairment losses on available for sale securities, a $5.1
million reduction in the provision for loan and lease losses, a $2.7
million increase in net interest income mainly due to a 51 basis point
increase in net interest margin as a result of lower funding costs and a
reduction of $474 thousand in income tax expense related to the surrender
of bank owned life insurance in 2009. Partially offsetting these
improvements was a $2.0 million increase in impairment of other real estate
owned, a $1.7 million increase in impairment of real estate owned via
equity investments and a $1.6 million increase in impairment of real estate
joint ventures. Excluding these items, other operating expenses decreased
$2.2 million.
Robert R. Tabas, Chairman and CEO, commented, "Although we continue to face
significant pressure, our balance sheet has begun to reflect the positive
impact of our strategic plan, including efforts to deleverage our balance
sheet, increase small business lending and minimize risks in our investment
portfolio."
In a statement echoed in a letter to shareholders dated November 15, 2010,
Tabas noted, "(Our) management team is working diligently to navigate Royal
through the unprecedented economic times that we face. We are making
progress positioning Royal to operate successfully in the new economic
reality, and serve our community -- and our shareholders -- for the long
haul."
A digital version of the letter to shareholders is available online at
www.royalbankamerica.com/investor.php
The following is an overview of key financial metrics:
Net interest income increased to $7.6 million in the third quarter of 2010,
from $7.2 million for the same period in 2009, largely due to a lower cost
of funds compared to prior periods. This also drove an increase in net
interest income to $23.9 million for the nine months ended September 30,
2010, compared to $21.2 million for the same period in 2009.
Net interest margin in the third quarter was 2.88%, up 52 basis points from
the comparable 2009 quarter of 2.36%. Net interest margin for the nine
month period was 2.89%, up 51 basis points from 2.38% in the comparable
period of 2009.
Total assets were $1.1 billion at September 30, 2010, a decrease of $175
million or 13.5% from $1.3 billion at December 31, 2009.
At September 30, 2010, Royal Bank America had capital ratios above the
level required to meet regulatory standards for a well-capitalized
institution.
Third quarter 2010 deposit levels were $743.5 million (including Royal
Asian Bank deposits held for sale), down $138.3 million or 15.68% from
$881.8 million at December 31, 2009 and down $48.3 million or 6.1% from
$791.8 million at June 30, 2010. This was primarily due to the
continuation of the bank's previously outlined strategy to reduce reliance
on brokered deposits (down $45.2 million for the quarter and $108.0 million
for the nine month period) and instead focus on more competitively priced
branch deposits.
Net loans and leases at quarter end were $595.5 million (including Royal
Asian Bank loans held for sale), down 9.3% or $61.0 million compared to
$656.5 million at December 31, 2009 and down $18.2 million or 2.89% from
$612.2 million at June 30, 2010.
Non-accrual and impaired loans were $83.0 million at September 30, 2010,
compared to $73.7 million at December 31, 2009. An increase in new
non-accrual loans since year end was partially offset by loans becoming
current and placed back on accrual status, loan payoffs, transfers to other
real estate owned, and charge-offs. Royal has no troubled debt restructured
loans or loans past due 90 days or more on which it has continued to accrue
interest during the quarter.
About Royal Bancshares of Pennsylvania, Inc.
Royal Bancshares of Pennsylvania, Inc., headquartered in Narberth,
Pennsylvania, is a two-bank holding company operating the Royal Bank
America and Royal Asian Bank brands in Pennsylvania, New Jersey and New
York. For the past 40+ years, Royal has played a lead role in the growth
and development of our region, empowering small businesses, entrepreneurs
and individuals to achieve their financial goals and enrich our
communities. More information on Royal Bancshares of Pennsylvania, our
banks and subsidiaries is available at
www.royalbankamerica.com.
Forward-Looking Statements
The foregoing material 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. For a discussion of the factors that could cause actual results
to differ from the results discussed in any such forward-looking
statements, see the filings made by Royal Bancshares of Pennsylvania, Inc.
with the Securities and Exchange Commission, including its Annual Report -
Form 10-K for the year ended December 31, 2009.
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT
(in thousands, except Three Months Nine Months
for earnings per Ended Sept. 30th Ended Sept. 30th
share) 2010 2009 2010 2009
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income $ 13,719 $ 16,799 $ 44,515 $ 49,723
Interest Expense 6,157 9,570 20,601 28,536
----------- ----------- ----------- -----------
Net Interest Income 7,562 7,229 23,914 21,187
Provision for Loan
Losses 2,194 3,716 8,387 13,469
----------- ----------- ----------- -----------
Net Interest Income
after Provision 5,368 3,513 15,527 7,718
Non Interest
Income/(Loss) 1,823 2,705 4,846 (4,283)
Non Interest Expense 10,333 9,829 28,425 25,373
----------- ----------- ----------- -----------
Loss before Taxes (3,142) (3,611) (8,052) (21,938)
Income Tax Expense 0 474 0 474
----------- ----------- ----------- -----------
Net Loss (3,142) (4,085) (8,052) (22,412)
Less Net (Loss)/Income
attributable to
noncontrolling
interest (347) 281 354 761
Net Loss attributable
to Royal Bancshares ($ 2,795) ($ 4,366) ($ 8,406) ($ 23,173)
=========== =========== =========== ===========
Loss per common share -
basic ($ 0.25) ($ 0.37) ($ 0.75) ($ 1.84)
=========== =========== =========== ===========
SELECTED RATIOS:
Return on Average
Assets -1.0% -1.3% -0.9% -2.4%
Return on Average
Equity -10.6% -15.4% -10.7% -29.3%
Average Equity to
Average Assets 9.1% 8.3% 8.7% 8.2%
Book Value Per Share $ 5.11 $ 6.07 $ 5.11 $ 6.07
CONDENSED BALANCE SHEET
(in thousands) Sept. 30, 2010 Dec. 31, 2009
(unaudited) (unaudited)
Cash and Cash Equivalents $ 74,634 $ 58,298
Investment Securities 332,651 449,671
Loans & Leases (net) 534,547 658,787
Assets Held for Sale 79,188 -
Premises and Equipment (net) 14,247 18,798
Accrued Interest receivable 16,775 14,942
Other Assets 65,647 92,230
-------------- --------------
Total Assets $ 1,117,689 $ 1,292,726
-------------- --------------
Deposits 676,695 881,755
Liabilities Held for Sale 67,137 -
Borrowings 214,152 257,827
Other Liabilities 32,242 23,056
Subordinated debentures 25,774 25,774
Royal Bancshares Shareholders' Equity 98,177 101,156
Noncontrolling Interest 3,512 3,158
-------------- --------------
Total Equity 101,689 104,314
-------------- --------------
Total Liabilities and Equity $ 1,117,689 $ 1,292,726
-------------- --------------
The above condensed financial information includes consolidation of
Equity Real Estate Investments,
owned by Royal Bancshares of Pennsylvania, Inc., which are required as a
result of FIN 46® "Variable Interest Entities."
Contact Information: Company Contact:
Marc Sanders
Director of Marketing
Royal Bank America
Office: 610-668-4700
Cell: 484-802-1944