Royal Bancshares of Pennsylvania Inc. (RBPAA, Financial) filed Quarterly Report for the period ended 2009-09-30.
Royal Bancshares of Pennsylvania, Inc. is a bank holding company. Royal Bancshares Of Pennsylvania Inc. has a market cap of $17.2 million; its shares were traded at around $1.58 with and P/S ratio of 0.3.
During the third quarter of 2009, the Company recorded a net loss of $4.4 million compared to a net loss of $12.0 million for the comparable quarter of 2008. The reduction in the net loss was primarily the result of a decrease of $14.2 million in impairment losses on available for sale securities ($492,000 in 2009 versus $14.7 million in 2008), a $2.4 million increase in gains on the sales of investment securities (gain in 2009 versus a loss in 2008), and a $1.6 million decrease in the provision for loan and lease losses. The Company recorded an OREO valuation allowance of $1.2 million related to two separate properties during the third quarter of 2009. FDIC and state assessments increased $1.4 million and OREO and loan collection expenses increased $657,000 quarter versus quarter which offset some of the reductions mentioned above. Also, the Company recorded a tax expense of $474,000 in the third quarter of 2009 compared to a $6.8 million tax benefit during the third quarter of 2008 due to its current tax position. As a consequence of the slowdown in the housing market and the economic recession, the Company has a high level of nonperforming loans, which continues to weigh on the net interest margin. Impaired and non-accrual loans are reviewed in the Credit Risk Management section of this report. Basic loss per share and diluted loss per share were both $0.37 for the third quarter of 2009, as compared to basic and diluted loss per share of $0.90 for the same quarter of 2008.
other real estate owned and nonperforming loans, a $2.2 million increase in the FDIC and state assessments, of which $600,000 was directly related to the FDIC special assessment that was accrued for in the second quarter and paid in September, a $2.0 million decrease in gains on the sales of premises and equipment, a $1.1 million decrease in gains on the sale of real estate joint ventures and a $382,000 increase in the provision for loan and lease losses. Net interest income decreased $6.1 million to $21.2 million for the nine months ended September 30, 2009 compared to $27.3 million for the same period in 2008. As previously noted, as a consequence of the slowdown in the housing market and the economic recession, the Company has a high level of non performing loans, which continues to weigh on the net interest margin. Impaired and non-accrual loans are reviewed in the Credit Risk Management section of this report. Basic and diluted loss per share were both $1.84 for the first nine months of 2009, while basic and diluted loss per share were both $0.81 for the first nine months of 2008.
Total interest income for the third quarter of 2009 amounted to $16.8 million representing a decline of $833,000, or 4.7%, from the level of the comparable quarter of 2008. The decrease in interest income reflected a decline in the yields on all interest earning assets due to a decline in the prime rate during the past fifteen months related to the Federal Reserves monetary policy which was partially offset by the overall level of average earning assets. Additionally, the year over year increase in non-accrual loans negatively impacted the yield on interest earning assets. Average loan balances of $720.6 million in the third quarter of 2009 increased $38.1 million (5.6%) year over year. The loan growth was attributed to an increased focus on commercial and industrial lending during the past four quarters, the introduction of small business lending in the fourth quarter of 2008, advances against existing outstanding loans, continued growth in tax certificates and leases and minimal loan prepayments. This growth was partially offset by loan charge-offs and transfers to OREO. Average investment securities increased $43.8 million (11.4%) from $385.4 million for the third quarter of 2008 to $429.2 million for the third quarter of 2009. The increase was comprised mainly of purchases of government agency mortgage-backed and government agency CMO securities which were offset by called agency investments and the recent sales of corporate bonds and the entire managed common stock portfolios. In an effort to boost liquidity, average cash equivalents of $78.2 million for the third quarter of 2009 increased $36.5 million, or 87.4%, from the level of the comparable quarter of 2008.
For the nine months ended September 30, 2009, total interest income amounted to $49.7 million versus $55.4 million for the comparable period of 2008 resulting in a decline of $5.7 million, or 10.3%. Consistent with the third quarter results, the decrease reflected a decline in the yields on all interest earning assets due to a decline in the prime rate during the past eighteen months related to the Federal Reserves monetary policy that negatively impacted prime based loans and investments purchased within the past year. Additionally, the year over year increase in non-accrual loans negatively impacted the yield on interest earning assets. Average interest earning assets for the first nine months of 2009 of $1.2 billion increased $93.6 million, or 8.5%, from the comparable period of 2008, which partially offset the decline in total interest income. Average loan balances of $719.7 million for the nine months ended September 30, 2009 increased $44.8 million (6.6%) year over year. The loan growth was attributed to an increased focus on commercial and industrial lending during the past four quarters, the introduction of small business lending in the fourth quarter of 2008, advances against existing outstanding loans, continued growth in tax certificates and leases and minimal loan prepayments. This growth was partially offset by loan charge-offs and transfers to OREO. Average investment securities of $426.6 million for the first nine months of 2009 increased $14.9 million (3.6%) from $411.8 million in the comparable period of 2008. The increase was comprised mainly of purchases of government agency securities which were offset by called agency investments and the recent sales of corporate bonds and the entire managed common stock portfolios. In an effort to maintain an increased
Interest expense increased $53,000 to $9.6 million for the quarter ended September 30, 2009 compared to the same period in 2008. The minimal increase in interest expense resulted from an increase in average interest bearing liabilities year over year almost entirely offset by a reduction in the interest rates paid on interest bearing liabilities year over year. Average interest bearing liabilities amounted to $1.1 billion in the third quarter of 2009, which increased $170.6 million, or 17.8%, above the third quarter of 2008. There was a shift in the deposit mix with average certificates of deposit increasing $167.6 million (37.2%) while average NOW and money markets declined $12.2 million (5.8%). Management elected to reduce the reliance on FHLB advances due to the suspension of the dividend at year end 2008 coupled with the current requirement of full collateral delivery status for FHLB advances. As a result of the recent FDIC and Department of Banking Read the The complete Report
Royal Bancshares of Pennsylvania, Inc. is a bank holding company. Royal Bancshares Of Pennsylvania Inc. has a market cap of $17.2 million; its shares were traded at around $1.58 with and P/S ratio of 0.3.
Highlight of Business Operations:
At September 30, 2009, the Company had consolidated total assets of approximately $1.4 billion, total deposits of approximately $908.0 million and shareholders equity of approximately $113.4 million. The Company had interest income of $16.8 million and $49.7 million, respectively for the three and nine month periods ended September 30, 2009, reflecting decreases of $833,000, or 4.7%, and $5.7 million, or 10.3%, respectively from the comparable periods of 2008. The year over year decline in interest income was attributed to a 325 basis point reduction in the prime rate by the Federal Reserve since the beginning of 2008 that negatively impacted prime based and variable rate loans coupled with an increase in nonperforming loans that resulted in the loss of accrued interest. Also contributing to the decline in interest income was a higher level of cash and cash equivalents during 2009, which was at a much lower yield, as a result of managements decision to maintain an increased level of liquidity during the current economic times. In addition, the yield on investment securities has decreased 101 and 87 basis points for the three and nine month periods in 2009, respectively, compared to the same periods in 2008 mainly as a result of higher yielding agency investments being called in the first quarter of 2009 and being replaced with considerably lower yielding agency investments coupled with a much lower yield being earned on the purchases made in 2009 compared to 2008. Interest expense for the three and nine months ended September 30, 2009 was $9.6 million and $28.5 million, respectively, resulting in an increase of $53,000, or 0.6%, and an increase of $394,000, or 1.4%, respectively from the comparable periods of 2008. The increase for the three and nine month periods was related to the higher volume of time deposits in 2009 compared to 2008. The Company recorded a net loss for the quarter ended September 30, 2009 of $4.4 million compared to a net loss of $12.0 million reported for the quarter ended September 30, 2008, while the net loss for the nine months ended September 30, 2009 was $23.2 million compared to a net loss of $10.8 million for the comparable period of 2008. The year-over-year reduction in net loss of $7.6 million, or 63.7%, for the current quarter was primarily associated with a decrease of $14.2 million in impairment losses on investment securities recognized in earnings, an increase of $2.4 million in gains on the sales of investment securities ($1.3 million gain in 2009 versus a $1.1 million loss in 2008), and a decrease of $1.6 million in the provision for loan and lease losses. Partially offsetting these positive effects on earnings was a $1.4 million increase in FDIC and state assessments and $1.2 million in OREO valuation allowances related to two properties.During the third quarter of 2009, the Company recorded a net loss of $4.4 million compared to a net loss of $12.0 million for the comparable quarter of 2008. The reduction in the net loss was primarily the result of a decrease of $14.2 million in impairment losses on available for sale securities ($492,000 in 2009 versus $14.7 million in 2008), a $2.4 million increase in gains on the sales of investment securities (gain in 2009 versus a loss in 2008), and a $1.6 million decrease in the provision for loan and lease losses. The Company recorded an OREO valuation allowance of $1.2 million related to two separate properties during the third quarter of 2009. FDIC and state assessments increased $1.4 million and OREO and loan collection expenses increased $657,000 quarter versus quarter which offset some of the reductions mentioned above. Also, the Company recorded a tax expense of $474,000 in the third quarter of 2009 compared to a $6.8 million tax benefit during the third quarter of 2008 due to its current tax position. As a consequence of the slowdown in the housing market and the economic recession, the Company has a high level of nonperforming loans, which continues to weigh on the net interest margin. Impaired and non-accrual loans are reviewed in the Credit Risk Management section of this report. Basic loss per share and diluted loss per share were both $0.37 for the third quarter of 2009, as compared to basic and diluted loss per share of $0.90 for the same quarter of 2008.
other real estate owned and nonperforming loans, a $2.2 million increase in the FDIC and state assessments, of which $600,000 was directly related to the FDIC special assessment that was accrued for in the second quarter and paid in September, a $2.0 million decrease in gains on the sales of premises and equipment, a $1.1 million decrease in gains on the sale of real estate joint ventures and a $382,000 increase in the provision for loan and lease losses. Net interest income decreased $6.1 million to $21.2 million for the nine months ended September 30, 2009 compared to $27.3 million for the same period in 2008. As previously noted, as a consequence of the slowdown in the housing market and the economic recession, the Company has a high level of non performing loans, which continues to weigh on the net interest margin. Impaired and non-accrual loans are reviewed in the Credit Risk Management section of this report. Basic and diluted loss per share were both $1.84 for the first nine months of 2009, while basic and diluted loss per share were both $0.81 for the first nine months of 2008.
Total interest income for the third quarter of 2009 amounted to $16.8 million representing a decline of $833,000, or 4.7%, from the level of the comparable quarter of 2008. The decrease in interest income reflected a decline in the yields on all interest earning assets due to a decline in the prime rate during the past fifteen months related to the Federal Reserves monetary policy which was partially offset by the overall level of average earning assets. Additionally, the year over year increase in non-accrual loans negatively impacted the yield on interest earning assets. Average loan balances of $720.6 million in the third quarter of 2009 increased $38.1 million (5.6%) year over year. The loan growth was attributed to an increased focus on commercial and industrial lending during the past four quarters, the introduction of small business lending in the fourth quarter of 2008, advances against existing outstanding loans, continued growth in tax certificates and leases and minimal loan prepayments. This growth was partially offset by loan charge-offs and transfers to OREO. Average investment securities increased $43.8 million (11.4%) from $385.4 million for the third quarter of 2008 to $429.2 million for the third quarter of 2009. The increase was comprised mainly of purchases of government agency mortgage-backed and government agency CMO securities which were offset by called agency investments and the recent sales of corporate bonds and the entire managed common stock portfolios. In an effort to boost liquidity, average cash equivalents of $78.2 million for the third quarter of 2009 increased $36.5 million, or 87.4%, from the level of the comparable quarter of 2008.
For the nine months ended September 30, 2009, total interest income amounted to $49.7 million versus $55.4 million for the comparable period of 2008 resulting in a decline of $5.7 million, or 10.3%. Consistent with the third quarter results, the decrease reflected a decline in the yields on all interest earning assets due to a decline in the prime rate during the past eighteen months related to the Federal Reserves monetary policy that negatively impacted prime based loans and investments purchased within the past year. Additionally, the year over year increase in non-accrual loans negatively impacted the yield on interest earning assets. Average interest earning assets for the first nine months of 2009 of $1.2 billion increased $93.6 million, or 8.5%, from the comparable period of 2008, which partially offset the decline in total interest income. Average loan balances of $719.7 million for the nine months ended September 30, 2009 increased $44.8 million (6.6%) year over year. The loan growth was attributed to an increased focus on commercial and industrial lending during the past four quarters, the introduction of small business lending in the fourth quarter of 2008, advances against existing outstanding loans, continued growth in tax certificates and leases and minimal loan prepayments. This growth was partially offset by loan charge-offs and transfers to OREO. Average investment securities of $426.6 million for the first nine months of 2009 increased $14.9 million (3.6%) from $411.8 million in the comparable period of 2008. The increase was comprised mainly of purchases of government agency securities which were offset by called agency investments and the recent sales of corporate bonds and the entire managed common stock portfolios. In an effort to maintain an increased
Interest expense increased $53,000 to $9.6 million for the quarter ended September 30, 2009 compared to the same period in 2008. The minimal increase in interest expense resulted from an increase in average interest bearing liabilities year over year almost entirely offset by a reduction in the interest rates paid on interest bearing liabilities year over year. Average interest bearing liabilities amounted to $1.1 billion in the third quarter of 2009, which increased $170.6 million, or 17.8%, above the third quarter of 2008. There was a shift in the deposit mix with average certificates of deposit increasing $167.6 million (37.2%) while average NOW and money markets declined $12.2 million (5.8%). Management elected to reduce the reliance on FHLB advances due to the suspension of the dividend at year end 2008 coupled with the current requirement of full collateral delivery status for FHLB advances. As a result of the recent FDIC and Department of Banking Read the The complete Report
