Royal Bancshares of Pennsylvania Inc. (RBPAA, Financial) filed Quarterly Report for the period ended 2012-06-30.
Royal Bancshares Of Pennsylvania, Inc. has a market cap of $26.1 million; its shares were traded at around $2.19 with and P/S ratio of 0.6.
For the six months ended June 30, 2012, the net loss amounted to $2.8 million compared to a net loss of $5.7 million for the comparable period of 2011, which represents a $2.9 million, or 50.9% improvement. The year over year improvement was primarily due to a $3.5 million decrease in provision for loan and lease losses as a result of the decline in the loan portfolio and improvement in non-performing loans, a $2.1 million reduction in OREO impairment and a $2.0 increase in gains on the sales of loans and leases. Partially offsetting these improvements was a $2.0 million legal contingency accrual for a potential settlement with the DOJ related to the tax lien subsidiaries that was recorded during the first six months of 2012, a $1.2 million decrease in net gains on the sales of OREO, a $942,000 decrease in net gains on the sales of AFS investment securities, lower net interest income of $816,000 associated with a reduction in interest earning assets, primarily loans which declined on average $91.5 million year over year, and a $478,000 increase in other-than-temporary impairment losses on investment securities which was related to one private equity real estate fund. After adjusting for the noncontrolling interest, the Company s 60% share of the loss contingency amounts to $1.2 million. (For additional information on the DOJ matter, see Item 1 “Legal Proceedings” of this Form 10-Q.) As previously noted, as a consequence of the continued weak housing market and slow growth economy, the Company continued to experience a high level of non-performing assets despite the recent progress. Impaired and non-accrual loans are reviewed in the “Credit Risk Management” section of this report. Basic and diluted losses per share were both $0.29 for the first six months of 2012, while basic and diluted losses per share were both $0.51 for the first six months of 2011.
Total interest income for the second quarter of 2012 amounted to $8.4 million, which represented a decline of $1.6 million, or 15.8%, from the comparable quarter of 2011. The decrease was primarily driven by a decline in average loan balances year over year and a decline in the yield on investments. Average interest earning assets of $762.2 million in the current quarter declined $92.2 million, or 10.8%, from $854.4 million in the comparable quarter of 2011, which was primarily attributed to a decline in loans. Average loan balances of $400.6 million in the second quarter of 2012 decreased $83.2 million, or 17.2%, year over year. The decline in loan balances was attributed to loan prepayments, loan pay downs including $ 25.2 million in higher yielding tax lien certificates, and transfers to OREO through foreclosure proceedings and was accompanied by minimal loan growth. As a result of the hiring of a new Chief Lending Officer and recent additions to the lending staff, the Company is committed to increasing its emphasis on commercial and industrial and small business lending. Average investment securities of $339.5 million during the second quarter of 2012 experienced an increase of $21.3 million, or 6.7%, from the second quarter of 2011 primarily due to the decline in the loan portfolio and the ability to maintain a lower level of cash equivalents due to strong liquidity levels. Average cash equivalents for the three months ended June 30, 2012, amounted to $22.1 million, which resulted in a decline of $30.3 million, or 57.8%. The decline resulted from the strong liquidity levels and improved funding options relative to the comparable period of 2011.
For the six months ended June 30, 2012, total interest income amounted to $17.2 million resulting in a decline of $3.3 million, or 16.3% year over year. The decrease was primarily driven by a decline in average loan balances year over year and a decline in the yield on investments, which were partially offset by the increased yield on loans. Average interest earning assets were $771.3 million for the first six months of 2012 compared to $860.5 million for the comparable period of 2011 resulting in a decline of $89.3 million, or 10.4%. Average loan balances of $411.1 million in the first half of 2012 decreased $91.5 million, or 18.2%, year over year and accounted for a majority of the decline. The decline in loan balances for the first half of 2012 was consistent with the second quarter change and was attributed to minimal loan growth, loan prepayments, loan pay downs including $23.1 million in tax lien certificates, and transfers to OREO through foreclosure proceedings. Average investments of $339.2 million increased $21.6 million, or 6.8%, from the first six months of 2011 due to declining loan balances and a reduction in cash equivalents.
Total non-accrual loans at June 30, 2012 were $32.1 million and were comprised of $28.5 million in LHFI and $3.6 million in LHFS. Total non-accrual loans at December 31, 2011 were $51.3 million and were comprised of $38.7 million in LHFI and $12.6 million in LHFS. The $19.2 million decrease was the result of a $15.1 million reduction in existing non-accrual loan balances through payments and sales, $9.1 million in transfers to OREO, and $781,000 in charge-offs partially offset by additions of $5.8 million. There was one commercial loan for $2.7 million that went non-accrual during the first quarter of 2012. If interest had been accrued, such income would have been approximately $831,000 and $1.8 million for the three and six months ended June 30, 2012, respectively. The Company had no loans past due 90 days or more on which it has continued to accrue interest during the quarter. Typically, loans are restored to accrual status when the loan is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectibility of the total contractual principal and interest is no longer in doubt.
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Royal Bancshares Of Pennsylvania, Inc. has a market cap of $26.1 million; its shares were traded at around $2.19 with and P/S ratio of 0.6.
Highlight of Business Operations:
For the six months ended June 30, 2012, the net loss amounted to $2.8 million compared to a net loss of $5.7 million for the comparable period of 2011, which represents a $2.9 million, or 50.9% improvement. The year over year improvement was primarily due to a $3.5 million decrease in provision for loan and lease losses as a result of the decline in the loan portfolio and improvement in non-performing loans, a $2.1 million reduction in OREO impairment and a $2.0 increase in gains on the sales of loans and leases. Partially offsetting these improvements was a $2.0 million legal contingency accrual for a potential settlement with the DOJ related to the tax lien subsidiaries that was recorded during the first six months of 2012, a $1.2 million decrease in net gains on the sales of OREO, a $942,000 decrease in net gains on the sales of AFS investment securities, lower net interest income of $816,000 associated with a reduction in interest earning assets, primarily loans which declined on average $91.5 million year over year, and a $478,000 increase in other-than-temporary impairment losses on investment securities which was related to one private equity real estate fund. After adjusting for the noncontrolling interest, the Company s 60% share of the loss contingency amounts to $1.2 million. (For additional information on the DOJ matter, see Item 1 “Legal Proceedings” of this Form 10-Q.) As previously noted, as a consequence of the continued weak housing market and slow growth economy, the Company continued to experience a high level of non-performing assets despite the recent progress. Impaired and non-accrual loans are reviewed in the “Credit Risk Management” section of this report. Basic and diluted losses per share were both $0.29 for the first six months of 2012, while basic and diluted losses per share were both $0.51 for the first six months of 2011.For the six months ended June 30, 2012, the net loss amounted to $2.8 million compared to a net loss of $5.7 million for the comparable period of 2011, which represents a $2.9 million, or 50.9% improvement. The year over year improvement was primarily due to a $3.5 million decrease in provision for loan and lease losses as a result of the decline in the loan portfolio and improvement in non-performing loans, a $2.1 million reduction in OREO impairment and a $2.0 increase in gains on the sales of loans and leases. Partially offsetting these improvements was a $2.0 million legal contingency accrual for a potential settlement with the DOJ related to the tax lien subsidiaries that was recorded during the first six months of 2012, a $1.2 million decrease in net gains on the sales of OREO, a $942,000 decrease in net gains on the sales of AFS investment securities, lower net interest income of $816,000 associated with a reduction in interest earning assets, primarily loans which declined on average $91.5 million year over year, and a $478,000 increase in other-than-temporary impairment losses on investment securities which was related to one private equity real estate fund. After adjusting for the noncontrolling interest, the Company s 60% share of the loss contingency amounts to $1.2 million. (For additional information on the DOJ matter, see Item 1 “Legal Proceedings” of this Form 10-Q.) As previously noted, as a consequence of the continued weak housing market and slow growth economy, the Company continued to experience a high level of non-performing assets despite the recent progress. Impaired and non-accrual loans are reviewed in the “Credit Risk Management” section of this report. Basic and diluted losses per share were both $0.29 for the first six months of 2012, while basic and diluted losses per share were both $0.51 for the first six months of 2011.
Total interest income for the second quarter of 2012 amounted to $8.4 million, which represented a decline of $1.6 million, or 15.8%, from the comparable quarter of 2011. The decrease was primarily driven by a decline in average loan balances year over year and a decline in the yield on investments. Average interest earning assets of $762.2 million in the current quarter declined $92.2 million, or 10.8%, from $854.4 million in the comparable quarter of 2011, which was primarily attributed to a decline in loans. Average loan balances of $400.6 million in the second quarter of 2012 decreased $83.2 million, or 17.2%, year over year. The decline in loan balances was attributed to loan prepayments, loan pay downs including $ 25.2 million in higher yielding tax lien certificates, and transfers to OREO through foreclosure proceedings and was accompanied by minimal loan growth. As a result of the hiring of a new Chief Lending Officer and recent additions to the lending staff, the Company is committed to increasing its emphasis on commercial and industrial and small business lending. Average investment securities of $339.5 million during the second quarter of 2012 experienced an increase of $21.3 million, or 6.7%, from the second quarter of 2011 primarily due to the decline in the loan portfolio and the ability to maintain a lower level of cash equivalents due to strong liquidity levels. Average cash equivalents for the three months ended June 30, 2012, amounted to $22.1 million, which resulted in a decline of $30.3 million, or 57.8%. The decline resulted from the strong liquidity levels and improved funding options relative to the comparable period of 2011.
For the six months ended June 30, 2012, total interest income amounted to $17.2 million resulting in a decline of $3.3 million, or 16.3% year over year. The decrease was primarily driven by a decline in average loan balances year over year and a decline in the yield on investments, which were partially offset by the increased yield on loans. Average interest earning assets were $771.3 million for the first six months of 2012 compared to $860.5 million for the comparable period of 2011 resulting in a decline of $89.3 million, or 10.4%. Average loan balances of $411.1 million in the first half of 2012 decreased $91.5 million, or 18.2%, year over year and accounted for a majority of the decline. The decline in loan balances for the first half of 2012 was consistent with the second quarter change and was attributed to minimal loan growth, loan prepayments, loan pay downs including $23.1 million in tax lien certificates, and transfers to OREO through foreclosure proceedings. Average investments of $339.2 million increased $21.6 million, or 6.8%, from the first six months of 2011 due to declining loan balances and a reduction in cash equivalents.
Total non-accrual loans at June 30, 2012 were $32.1 million and were comprised of $28.5 million in LHFI and $3.6 million in LHFS. Total non-accrual loans at December 31, 2011 were $51.3 million and were comprised of $38.7 million in LHFI and $12.6 million in LHFS. The $19.2 million decrease was the result of a $15.1 million reduction in existing non-accrual loan balances through payments and sales, $9.1 million in transfers to OREO, and $781,000 in charge-offs partially offset by additions of $5.8 million. There was one commercial loan for $2.7 million that went non-accrual during the first quarter of 2012. If interest had been accrued, such income would have been approximately $831,000 and $1.8 million for the three and six months ended June 30, 2012, respectively. The Company had no loans past due 90 days or more on which it has continued to accrue interest during the quarter. Typically, loans are restored to accrual status when the loan is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectibility of the total contractual principal and interest is no longer in doubt.
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